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EX-10.5 - EXHIBIT105 - ASTIKA HOLDINGS INC.exhibit105.htm
EX-10.3 - EXHIBIT103 - ASTIKA HOLDINGS INC.exhibit103.htm
EX-10.4 - EXHIBIT104 - ASTIKA HOLDINGS INC.exhibit104.htm
EX-23.1 - EXHIBIT231 - ASTIKA HOLDINGS INC.exhibit231.htm
EX-10.1 - EXHIBIT101 - ASTIKA HOLDINGS INC.exhibit101.htm
EX-10.2 - EXHIBIT102 - ASTIKA HOLDINGS INC.exhibit102.htm
EX-10.6 - EXHIBIT106 - ASTIKA HOLDINGS INC.exhibit106.htm
 


 
As filed with the Securities and Exchange Commission on August 6, 2012
 
 
Registration No. 333- 182113
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
______________________________

AMENDMENT NO. 1
TO
FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
_____________________________
 
 
ASTIKA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
 
___________________________
 
FLORIDA
(State or other jurisdiction of
incorporation or organization)
 
3652
(Primary Standard Industrial
Classification Code Number)
 
27-4601693
(I.R.S. Employer
Identification No.)
 
7000 W. Palmetto Park Road, Suite 409, Boca Raton, Florida  33433   (509) 562-3211
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
 
__________________________
 
Eugene B. Settler
Chairman of the Board, President, Chief Executive Officer and Treasurer
7000 W. Palmetto Park Road, Suite 409
Boca Raton, Florida 33433
(509) 562-3211
(Name, address, including zip code, and telephone number including area code, of agent for service)
 
_________________________
 
With a copy to:
 
Michael H. Hoffman, Esq.
Law Offices of Michael H. Hoffman, P.A.
1521 Alton Road, No. 284
Miami, Florida 33139
Telephone:  (786) 280-7575 and Facsimile (305) 865-3430
 
_________________________
 
Approximate date of commencement of proposed sale to the public:  From time to time after this Registration Statement is declared effective.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ý
 
 
 
 
 
 
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer          o                                                                                Accelerated filer                           o
Non-accelerated filer            o                                                                                Smaller reporting company         x
(Do not check if a smaller reporting company)
 
 
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 
 
 
 
 
 


 

 
 
 
 
 
 
 
P R O S P E C T U S

ASTIKA HOLDINGS, INC.

40,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK

PRICE PER SHARE:   $10.00
TOTAL OFFERING AMOUNT: $400,000
 
The name of our company is Astika Holdings, Inc. and we were incorporated in the State of Florida on January 13, 2011.  We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, which became law in April 2012.  This is our initial public offering.  Our securities are not listed on any national securities exchange, over the counter quotation system or the Nasdaq Stock Market.  We are offering a total of 40,000 shares of our Series A Convertible Preferred Stock, par value $.001 per share, in a direct public offering at a fixed price of $10 per share for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior to such date.  There are no extension periods.  This prospectus also relates to the offering of up to 11,000,000 shares of our common stock, par value $.001 per share, which may be issued upon the conversion of the Series A Convertible Preferred Stock.  One share of Series A Convertible Preferred Stock will be required to be converted into 275 shares of our common stock within 120 days of the consummation of the offering; however, you may convert such shares at any time prior thereto.  No additional payment is required in connection with such conversion.  
 
In the event that a dividend or distribution is declared by the Board of Directors on the Series A Convertible Preferred Stock, the terms of the Series A Convertible Preferred Stock do not require that a fixed amount be payable to such holders.  In the event that we are liquidated, the holders of Series A Convertible Preferred Stock would be entitled to receive the amount of $10 per share plus any accumulated and unpaid dividends before any distribution is made to the holders of our common stock.
 
This is a best efforts offering that will not utilize any underwriters or broker-dealers.  The shares are being offered by our directors and officers pursuant to an exemption as a broker/dealer under Rule 3a 4-1 of the Securities Exchange Act of 1934.  There is no minimum number of shares of Series A Convertible Preferred Stock that are required to be sold in the offering.  The amount of shares being sold to prospective investors may vary and we may not sell all of the shares being offered.  We may receive no proceeds or very minimal proceeds from the offering.  Prospective investors could end up holding shares in our public reporting company, for which we have no market for our shares and have not received enough proceeds from this offering for our business operations and meeting our reporting obligations as a public company.  Proceeds from the sale of the shares, up to $400,000, if all the shares being offered are sold, may be used by us upon receipt.  We will not be placing any of these funds in an escrow account, and, as a result, any creditors of the Company may be able to gain access to these funds.  
 
Our independent auditors have raised substantial doubt as to our ability to continue as a going concern, as expressed in its opinion on our financial statements included in this prospectus.  Prospective investors may end up holding shares in our public reporting company, for which we have no market for our shares and have not received enough proceeds from our offering to move forward with our business operations and meet our public company reporting obligations.
 
 The purchase of the securities offered through this prospectus involves a high degree of risk. See “Risk Factors” beginning on page 7.
 
These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. We are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

   
Offering
Price ($)
   
Offering
Expenses ($)
   
Net Proceeds
to Us if 25% of
Shares Sold
(10,000 Shares) ($)
   
Net Proceeds
to Us if 50% of
Shares Sold
(20,000 Shares) ($)
   
Net Proceeds
to Us if 75% of
Shares Sold
(30,000 Shares) ($)
   
Net Proceeds
to Us if 100% of
Shares Sold
(40,000 Shares) ($)
 
                                                 
Per Share
    10.00       (1)(2)       5.00       7.50       8.333       8.75  
                                                 
Total (3)
    400,000       50,000       50,000       150,000       250,000       350,000  
__________
 
(1)
The total amount of offering expenses is estimated to be $50,000.  The offering expenses per share will vary depend on the total number of shares sold in the offering.  See “Use of Proceeds” for additional information.
   
(2)
There are no underwriting discounts or commissions being paid in connection with this offering.   Our directors will not receive any compensation for their role in offering or selling the shares in this offering.
   
(3)
Net Proceeds includes the deduction of offering expenses estimated to be $50,000.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
 
 
THE DATE OF THIS PROSPECTUS IS _________________
 
 
 
 
 
 
 
 
 
The following Table of Contents has been designed to help you find important information contained in this prospectus. We encourage you to read the entire prospectus.
 
 
 
 
Item
 
Page No.
     
 
1
 
1
 
2
 
7
 
11
 
12
 
13
 
14
 
14
 
15
 
16
 
17
 
23
 
24
 
27
Legal Proceedings  
27
 
27
 
30
 
34
 
35
 
40
 
41
 
41
 
41
 
41
 
41
 
42
 
42
 
42
 
F - 1

________________________
 
 


 
- ii -


 
 
 
 
 
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission.  The registration statement containing this prospectus, including the exhibits to the registration statement, also contains additional information about Astika Holdings, Inc. and the securities offered under this prospectus. That registration statement can be read at the Securities and Exchange Commission's website (located at www.sec.gov) or at the Securities and Exchange Commission’s Public Reference Room mentioned under the heading “Where You Can Find More Information” of this prospectus.
 
You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document. Our business, financial condition or results of operations may have changed since that date.
 
 
As used in this prospectus: (i) the terms “we”, “us”, “our”, and the “Company” mean Astika Holdings, Inc. and its subsidiary, Astika Music Entertainment, Inc.; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the United States Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the United States Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.
 
 
 
 
 
________________________
 
 
 
 
 
 


 
 
 
 
The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the “Risk Factors” section, the financial statements and the notes to the financial statements included elsewhere herein.
 
Our Company

Astika Holdings, Inc., a Florida corporation, is a music publishing company in the development stage.  We own and acquire rights to musical compositions, exploit and market these compositions and receive royalties or fees for their use from domestic and international sources.   We have a total of 14 original musical compositions in our catalog as of the date of this prospectus, of which 11 compositions have been published.  Our music catalog includes the composer/arranger rights in four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which Eugene B. Settler, our Chairman, President, Chief Executive Officer, Treasurer and a staff songwriter, assigned and transferred to us at no cost on January 25, 2011.  The composer/arranger rights to these musical compositions have been reflected on the records of the performing rights society Broadcast Music Inc. (BMI).  We also have a copyrighted recorded music compilation consisting of seven musical compositions that we acquired for $5,000 on June 15, 2012, from EuGene Gant, one of our exclusive songwriters, entitled, “Eugenius SOL Presents:  Green and Healthy”, which is available for sale on the Internet website www.alephmusic.com.  We own the copyrights on the remaining three musical compositions in our catalog, which were delivered to us on July 1, 2012, without any advance payment, pursuant to an exclusive songwriter agreement that we have with Mr. Settler dated June 16, 2012.  However, these three musical compositions have not yet been published in any media or format.   During the period from January 13, 2011, our inception, through March 31, 2012, we generated revenues in the amount of $1,660 and have an accumulated deficit in the amount of $5,559.
 
Our company structure is set forth in the following chart:

ASTIKA HOLDINGS, INC.
a Florida corporation
 
 
ASTIKA MUSIC ENTERTAINMENT, INC.
a Florida corporation
(100% Owned Subsidiary)

 
We are offering a total of 40,000 shares of our Series A Convertible Preferred Stock, par value $.001 per share, in a direct public offering at a fixed price of $10 per share for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior to such date.  There are no extension periods.  The amount of shares being sold to prospective investors may vary and we may not sell all of the shares being offered.  There is no minimum number of shares that are required to be sold in the offering.  We may receive no proceeds or very minimal proceeds from the offering.  One share of Series A Convertible Preferred Stock will be required to be converted into 275 shares of our common stock within 120 days of the consummation of the offering; however, you may convert such shares at any time prior thereto.
 
We will require a minimum amount of $75,000 from the sale of shares in this offering to have an operating business and meet our public company reporting obligations for at least the next 12 months.  In the event that we do not raise at least $75,000 in proceeds from this offering, we will not have sufficient capital to allow us to execute our business plan and meet our public company reporting requirements for the duration of this period.  Accordingly, we will need to obtain additional equity and/or debt financing for which no sources may exist.  If we are unable to raise a minimum of $75,000 from this offering and/or obtain such minimum amount in combination with other potential sources of equity and/or debt financing on a timely basis, we will become insolvent and forced to discontinue our operations and liquidate our assets.
 
 
 
 
 
- 2 -

 
 
 
 
 
In the event that we raise at least $100,000 from the sale of shares in this offering (i.e., 25% of the shares being offered are sold), during the next 12 months, we will be able to have an operating business and meet our public company reporting requirements, complete the development of our website, including making all the musical compositions in our catalog available for sale as digital downloads on our website and provide $6,000 in executive compensation to Mr. Settler.  In the event that we raise at least $200,000 in this offering (i.e., 50% of the shares being offered are sold), during the next 24 months, we will be able to have an operating business and meet our public company reporting requirements, produce 20 new musical compositions and make them available for digital download on our website, provide $6,000 in executive compensation to Mr. Settler and engage in limited marketing and promotional activities.  In the event that we raise at least $300,000 in this offering (i.e., 75% of the shares being offered are sold), during the next 36 months, we will be able to have an operating business and meet our public company reporting requirements, produce 30 new musical compositions and make them available for digital download on our website, provide $26,000 in executive compensation to Mr. Settler and engage in limited marketing and promotional activities.  In the event that we raise at least $400,000 in this offering (i.e., 100% of the shares being offered are sold), during the next 48 months, we will be able to have an operating business and meet our public company reporting requirements, produce 40 new musical compositions and make them available for digital download on our website, engage in limited marketing and promotional activities and provide executive compensation to Mr. Settler in the amount of $39,500.  See “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.
 
We are not a “blank check company”, because we believe that we do not meet the definition of a company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity or person.  The Company, its officers and directors, promoters or any of their affiliates, do not intend, once the Company is reporting, for it to be used as a vehicle for a private company to become a reporting company.
 
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012.  Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Our independent auditors have raised substantial doubt as to our ability to continue as a going concern, as expressed in its opinion on our financial statements included in this prospectus.  Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and repay our liabilities as they arise.  There can be no assurance that we will operate at a profit or such additional financing will be available, or if available, can be obtained on satisfactory terms.

Our principal executive offices are located at 7000 W. Palmetto Park Road, Suite 409, Boca Raton, Florida  33433.  Our telephone number is (509) 562-3211.  We were incorporated under the laws of the State of Florida on January 13, 2011.
 
 
 

 

 
 

 
The Offering

The Issuer:
Astika Holdings, Inc.
   
Securities Offered:
We are offering a total of 40,000 shares of our Series A Convertible Preferred Stock, par value $.001 per share, in a direct public offering.  The amount of shares being sold to prospective investors may vary and we may not sell all of the shares being offered.  There is no minimum number of shares that are required to be sold in the offering.  We may receive no proceeds or very minimal proceeds from the offering.  We believe that an offering of Series A Convertible Preferred Stock is more attractive than an offering of Common Stock, because there are currently no shares of Series A Convertible Preferred Stock outstanding and such holders will be entitled to a $10 per share liquidation preference, plus all accumulated and unpaid dividends on those shares, before any distribution is made to holders of our common stock.
   
Offering Price and Term of
Offering:
We are offering the shares of Series A Convertible Preferred Stock at a fixed price of $10 per share for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior thereto in our sole discretion.
   
Dividends:
In the event that a dividend is declared by the Board of Directors on the Series A Convertible Preferred Stock, the terms of the Series A Convertible Preferred Stock do not require that a fixed amount be payable to such holders.  Also, there is no preference associated with the issuance of dividends on the Series A Convertible Preferred Stock.  In the event a dividend is declared on the common stock of the Company, in cash or other property, the holders of the Series A Convertible Preferred Stock will be entitled to receive the amount of cash or property equal to the cash or property which would be received by the holders of the number of shares of common stock into which such shares of Series A Convertible Preferred Stock could be converted immediately prior to such dividend.  We have not paid any dividends on our common stock, and it is not anticipated that any dividends will be paid in the foreseeable future.
   
Mandatory Conversion
of Series A Convertible
Preferred Stock into
Common Stock:
We will convert the Series A Convertible Preferred Stock within 120 days of the consummation of the offering; however, you may convert the Series A Convertible Preferred Stock at any time prior thereto.  One share of Series A Convertible Preferred Stock will be converted at a conversion rate of 275 shares of common stock for each share of Series A Convertible Preferred Stock, subject to adjustment in a number of circumstances described under “Description of Series A Convertible Preferred Stock.”  No additional payment is required in connection with such a conversion.
   
Voting Rights:
The holders of Series A Convertible Preferred Stock will vote, on an as converted basis, on the same matters as the holders of common stock and there is no limitation whatsoever on the voting rights associated with the Series A Convertible Preferred Stock.
   
Material Differences Between
Series A Convertible Preferred
Stock and Common Stock:
The material differences between the Series A Convertible Preferred Stock and Common Stock are that holders of Series A Convertible Preferred Stock are entitled to receive (i) a liquidation Preference, as described above in “Securities Offered”, and (ii) payment of dividends, as a separate class, if declared, by the Board of Directors.  The holders of common stock are not entitled to receive such liquidation preference or any dividends paid to the holders of Series A Convertible Preferred Stock.  See “Description of Capital Stock” for more information.
   
Common Stock Outstanding:
 
   
Prior to Offering:
8,160,000 shares
   
Assuming sale of all Series A
Convertible Preferred Stock and
conversion of such shares into
shares of common stock:
19,160,000 shares

 
 

 

 

Risk Factors:
See “Risk Factors” and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in our securities.  Such factors include, but are not limited to, being a development stage company that has earned minimal revenues and never operated profitably, needing additional financing to continue as a going concern, substantial voting power being concentrated in the hands of our majority shareholders, the dependence on our key executive, Eugene Settler, for our business operations and a competitive music publishing marketplace and management having broad discretion as to the use of the proceeds from this offering.
   
Use of Proceeds: We intend to use the proceeds of this offering for the payment of expenses associated with this offering, public company reporting requirements and our business operations, including corporate website development and updates, music production, marketing and promotional activities, executive compensation and general and administrative expenses.  See “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional information.
 

 
 
 
 
 
 
 

 

 
 
 
 
Summary of Financial Data
 
The following financial data has been derived from and should be read in conjunction with (i) our consolidated financial statements for the period from January 13, 2011, our inception, to December 31, 2011 (audited), the period from January 13, 2011, our inception, to March 31, 2011 (unaudited), the three month period ended March 31, 2012 (unaudited), and cumulative for the period from January 13, 2011, our inception, to March 31, 2012 (unaudited), together with the notes to these consolidated financial statements; and (ii) the sections of this prospectus entitled “Description of Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included elsewhere herein.  Our historical results are not necessarily indicative of the results we may achieve in any future period.
 
Under the JOBS Act, “emerging growth companies”, can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
 
Consolidated Statements of Operations Data:
   
Period from
January 13, 2011
(inception) to
December 31, 2011
(Audited)
      Period from
January 13, 2011
(inception) to
March 31, 2011
(Unaudited)
   
Three Months
Ended
March 31, 2012
(Unaudited)
   
Period from
January 13, 2011
(inception) to
March 31, 2012
(Unaudited)
 
                                 
Revenue:
  834     $     $ 826     $ 1,660  
                                 
Expenses:
                               
General and administrative
    4,743       34       2,476       7,219  
                                 
Net (loss)
    (3,909   $ (34 )   $ (1,650 )     (5,559 )
                                 
Basic and diluted net (loss) per share
  $ **     $ **     $ **          
Weighted average number of common shares outstanding
    4,895,294        857,576       7,272,967          
 
**  less than $0.01 per share

Consolidated Balance Sheet Data:
  As of
December 31, 2011
(Audited)
   
As of
March 31, 2012
(Unaudited)
 
             
Cash and cash equivalents
  $ 8,033     $ 11,048  
Working capital
    8,033       9,048  
Total assets
    8,491       14,201  
Total liabilities
          2,000  
Total shareholders’ equity
    8,491       12,201  

 
 
 

 

 
 
 
 
 
An investment in our securities involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing our securities. Our business, operating results and financial condition could be seriously harmed due to any of the following risks.  You could lose all or part of your investment due to any of these risks.
 
Risks Related To Our Financial Condition and Business Model

Because we have only recently commenced business operations, we face a high risk of business failure.

We recently commenced business operations and entered the music publishing business in June, 2012.  As a result, we have no way to evaluate the likelihood that we will be able to operate our business successfully.  For the period January 13, 2011, our inception, to March 31, 2012, we have generated revenues in the amount of $1,660 and have an accumulated deficit in the amount of $5,559.  We continue to operate at a loss as of the date of this prospectus, and thus face a high risk of business failure.  Investing in a business in the start-up phase is much riskier than investing in a business that is profitable and already has a history of operations.
 
Because we will need additional financing to fund the development of our business and meet our public company reporting requirements, our independent auditors believe there is substantial doubt about our ability to continue as a going concern.
 
For the period January 13, 2011, our inception, to March 31, 2012, we had an accumulated deficit of $5,559 and continue to operate at a loss as of the date of this prospectus.  Our independent auditors have issued a going concern opinion and have raised substantial doubt as to our ability to continue as a going concern.  Our ability to continue as a going concern is dependent upon our ability to operate profitably and/or to obtain the necessary financing to meet our obligations and repay our liabilities when they come due.  The outcome of these matters cannot be predicted with any certainty at this time. Further, there is no history upon which to base any assumption as to the likelihood that we will prove ourselves successful.  These factors raise substantial doubt that we will be able to continue as a going concern.
 
When an auditor issues a going concern opinion, the auditor has substantial doubt that the company will continue to operate indefinitely and not go out of business and liquidate its assets. This is a significant risk to investors who purchase shares of our securities in this offering because there is an increased risk that we may not be able to generate enough cash and/or obtain adequate debt or equity financing to remain operational for an indefinite period of time.  The auditor’s going concern opinion may inhibit our ability to raise capital, because potential investors’ could become concerned that we may not remain operational for an indefinite period of time resulting in investors failing to receive any return on their investment or losing their entire investment.
 
The loss of Eugene Settler could harm our business, because Mr. Settler is our only executive officer that has music industry experience and we are relying on his abilities to grow our music publishing business.
 
We depend on the continued services and performance of Eugene B. Settler, our President, Chief Executive Officer and Treasurer, who is our only executive officer of the Company that has music industry experience. We are relying on his abilities to grow our music publishing business that we recently entered in June, 2012.  We have not entered into an executive employment agreement with Mr. Settler and, accordingly, his employment as our President, Chief Executive Officer and Treasurer constitutes at-will employment.  The loss of Mr. Settler could disrupt our operations and have an adverse effect on our music publishing business and results of operations.  In the event that Mr. Settler no longer works for us or we want to add other qualified personnel in the future, we cannot guarantee we will be able to attract other professionals with music industry experience to work for us.  If we do not succeed in retaining Mr. Settler and/or attracting, hiring and integrating other qualified personnel needed to manage our business, we may be forced to discontinue our operations and liquidate our assets.
 
  Our prospects and financial results may be adversely affected if we fail to retain our staff songwriters, Eugene Settler and EuGene Gant, or fail identify, sign and retain other songwriters and composers.
 
We are dependent on identifying, signing and retaining songwriters and composers with long-term potential, who will write musical compositions that will continue to generate sales as part of our catalog for years to come. The competition among music publishing companies for such talent is intense.  EuGene Gant and Eugene Settler have entered into songwriter agreements with us whereby each of them has agreed to write musical compositions for us on an exclusive basis as works for hire for a period expiring on June 15, 2014 and June 16, 2017, respectively, in exchange for our assistance in exploiting and marketing their compositions and the payment of royalties to them.  We depend on the continued services and performance of these songwriters to write musical compositions for us in accordance with the terms of their respective agreements. As a result, our competitive position in the music publishing business is very weak and is dependent on our ability to retain Mr. Settler and Mr. Gant and attract and develop other musical composers whose work can achieve a high degree of public acceptance. Our financial results may also be adversely affected if we are unable to identify, sign and retain musical composers under terms that are economically attractive to us.  Additionally, our financial results are generally affected by the appeal of our music catalog.
 
 
 
 

 
 
We recently commenced our music publishing business in June 2012, and due to the nature of the music publishing business, our results of operations and cash flows may fluctuate significantly from period to period; however, we do not have a history of generating enough music publishing royalties to analyze the nature and extent of these fluctuations.
 
To date, substantially all of the revenues that we have generated have come from the performance royalties on our composer and arranger rights to the four musical compositions that were originally included in the Raiders of the Lost Ark movie in 1981, and which we acquired on January 25, 2011.  Our revenues have fluctuated based upon the performance royalties collected by BMI that are generated from these musical compositions, which is attributable directly to the number of performances of the Raiders of the Lost Ark movie for which BMI collects royalties on our behalf.  We anticipate that as we grow our music publishing business, our results of operations and cash flows, like those of other companies in the music publishing business, will be largely affected by, and may fluctuate due to, contributing factors relating to the timing and amount of performances of musical compositions that BMI can collect performance royalties on, the number and quality of musical compositions published by us, the timing of  a release for any recorded music containing one or more of our musical compositions and, more importantly, the effectiveness of our sales and marketing efforts and the resultant consumer demand for these releases.  However, we have no way to evaluate the anticipated fluctuations in our results of operations and cash flows that may occur from period to period due to our recent entry into the music publishing business in June 2012.  
 
Substantially all of our royalties to date have been performance royalties, which are subject to rate regulation by third-party collection societies or negotiated on an industry-wide basis and, therefore, the ability to increase the profitability of our music catalog may be limited.
 
To date, we have earned mostly performance royalties, because the most significant source of royalties in our music catalog have come from the performance royalties on our composer and arranger rights to the four musical compositions that were originally included in the Raiders of the Lost Ark movie in 1981, and which we acquired on January 25, 2011.  There were no other royalty generating opportunities in connection with our music catalog until June 15, 2012, at which time we acquired the copyrights on a recorded music compilation consisting of seven songs from Mr. Gant, one of our songwriters.  In the U.S., performance royalty rates are set by performing rights societies and subject to challenge by performing rights licensees   Outside the U.S., performance royalty rates are typically negotiated on an industry-wide basis. The performance royalty rates set pursuant to such processes may adversely affect us by limiting our ability to increase the profitability of our music catalog.

Substantial voting power is concentrated in the hands of our majority shareholders, which enables the majority shareholders to exercise significant control of our Company, including the ability effectively to control decisions on all matters on which shareholders are entitled to vote.

Sawgrass Resources, Inc., owns 7,240,000 shares of common stock of the Company and Eugene B. Settler, our Chief Executive Officer, President and Treasurer owns 800,000 shares of common stock of the Company, which in the aggregate is approximately 98.5% of the Company’s outstanding shares of common stock as of the date of this prospectus.  Accordingly, Sawgrass Resources, Inc., individually, and Sawgrass Resources, Inc. and Mr. Settler, collectively, have the power to elect all of the members of the Company’s Board of Directors, amend the Company’s Articles of Incorporation and Bylaws and effect or preclude fundamental corporate transactions involving the Company, including the acceptance or rejection of proposals relating to a merger of the Company or the acquisition of the Company by another entity.  Sawgrass Resources, Inc. and Mr. Settler are, therefore, able to exert significant influence over the Company, including the ability effectively to control decisions on all matters on which shareholders are entitled to vote.  We need to sell at least 29,674 shares of Series A Convertible Preferred Stock in the offering in order for Sawgrass Resources, Inc. and Mr. Settler to collectively own less than a majority of the outstanding shares of capital stock of the Company on an as converted basis.   See “Security Ownership of Certain Beneficial Owners and Management” and “Description of Capital Stock.”

Additional issuances of equity securities will have a dilutive effect on the interests of our existing shareholders.

The shares of Series A Convertible Preferred Stock (and the shares of common stock issuable upon their conversion) are subject to dilution. The Board of Directors expects, and we may need to issue, additional shares of common stock or preferred stock in one or more series or classes to new investors in the future.  We have sole discretion to sell additional equity securities to new investors, and may even sell equity securities at a lower purchase price per share than the $10 per share offering price of the Series A Convertible Preferred Stock.  We may also sell new series or classes of equity securities with rights, preferences and privileges senior to the Series A Convertible Preferred Stock without your consent.  Any issuance of additional equity securities, regardless of valuation, will have a dilutive effect on your ownership interest of our Company and could adversely affect your rights associated with your ownership of our Series A Convertible Preferred Stock or common stock.
 
 
 

 


 
We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any December 31 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile should such a trading market develop.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Risks Related To This Offering
 
Management will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that you do not agree with or that do not improve our results of operations or enhance the value of our shares. Our failure to apply these funds effectively could have a material adverse effect on our business and cause the value of our shares to decline.
 
We may not receive enough capital from this offering to enable us to continue operating our business.
 
We are dependent on the availability of capital from this offering to proceed with our business plan.  We are selling the shares directly to public at a fixed price of $10 per share for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior to such date.  We are offering the shares on a best efforts basis without the use of a registered broker/dealer firm, so we may not sell a sufficient number of shares to successfully implement our business plan.  We have no commitments for additional capital as of the date of this prospectus and will not seek other capital until the termination of this offering.  Accordingly, investors are advised that the proceeds of this offering may not be sufficient to enable us to conduct our business; and, if additional sufficient capital is not received, we may have to curtail our operations or liquidate our assets.
 
We will require a minimum amount of $75,000 from the sale of shares in this offering to have an operating business and meet our public company reporting obligations for at least the next 12 months.  In the event that we do not raise at least $75,000 in proceeds from this offering, we will not have sufficient capital to allow us to execute our business plan and meet our public company reporting requirements for the duration of this period.  Accordingly, we will need to obtain additional equity and/or debt financing for which no sources may exist.  If we are unable to raise a minimum of $75,000 from this offering and/or obtain such minimum amount in combination with other potential sources of equity and/or debt financing on a timely basis, we will become insolvent and forced to discontinue our operations and liquidate our assets.
 
In the event that we raise at least $100,000 from the sale of shares in this offering (i.e., 25% of the shares being offered are sold), during the next 12 months, we will be able to have an operating business and meet our public company reporting requirements, complete the development of our website, including making all the musical compositions in our catalog available for sale as digital downloads on our website and provide $6,000 in executive compensation to Mr. Settler.  In the event that we raise at least $200,000 in this offering (i.e., 50% of the shares being offered are sold), during the next 24 months, we will be able to have an operating business and meet our public company reporting requirements, produce 20 new musical compositions and make them available for digital download on our website, provide $6,000 in executive compensation to Mr. Settler and engage in limited marketing and promotional activities.  In the event that we raise at least $300,000 in this offering (i.e., 75% of the shares being offered are sold), during the next 36 months, we will be able to have an operating business and meet our public company reporting requirements, produce 30 new musical compositions and make them available for digital download on our website, provide $26,000 in executive compensation to Mr. Settler and engage in limited marketing and promotional activities.  In the event that we raise at least $400,000 in this offering (i.e., 100% of the shares being offered are sold), during the next 48 months, we will be able to have an operating business and meet our public company reporting requirements, produce 40 new musical compositions and make them available for digital download on our website, engage in limited marketing and promotional activities and provide executive compensation to Mr. Settler in the amount of $39,500.

 
 
 

 


 
This is a risky investment because there is no minimum number of shares that must be sold in this offering.
 
There is no minimum number of shares of Series A Convertible Preferred Stock that must be sold in this offering.  The amount of shares being sold to prospective investors may vary and we may not sell all of the shares being offered.  We may receive no proceeds or very minimal proceeds from the offering.  The funds raised in this offering may not be sufficient to defray the costs associated with making this offering and provide us with enough working capital to successfully launch our business.  Because there is no minimum number of shares that must be sold in this offering, the funds raised in this offering may not be sufficient to cover our operating expenses and meet our public company reporting requirements, therefore, we may become insolvent and forced to discontinue our operations and liquidate our assets.
 
If a market for our common stock does not develop, shareholders may be unable to sell their shares.

There is presently no public market for our shares of common stock or Series A Convertible Preferred Stock.  We intend to engage a market maker to make a market only in our common stock; however, there is no assurance that a trading market will develop or be sustained in our common stock.  We do not intend to develop a trading market for the Series A Convertible Preferred Stock.  Accordingly, you may have to hold the shares purchased in this offering indefinitely and/or may have difficulty selling such shares, as no market for our shares may develop.  We currently plan to hire a securities broker to serve as our market maker by filing an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of the registration statement, of which this prospectus forms a part.  However, our shares of common stock may never be traded on the Over-The-Counter Bulletin Board, or, if traded, a public market may not materialize.  To date we have not solicited any securities brokers to become market makers of our common stock and there can be no guarantee that we will able to find a market maker willing to file an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of the registration statement.  We anticipate that it may take approximately two months from the date of this prospectus for a market maker to file an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board, and that it may take approximately four months from the date of this prospectus for our common stock to be quoted on the Over-The-Counter Bulletin Board.  However, any application filed by a market maker on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board may not be approved.   If a public market for our common stock does not develop investors may not be able to re-sell their shares and may lose all of their investment.

If shareholders sell a large number of shares all at once or in blocks after this offering, the market price of our shares would most likely decline.

We are offering 40,000 shares of our Series A Convertible Preferred Stock at a fixed price of $10 per share, which are convertible into 11,000,000 shares of our common stock.  We are offering the shares for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior to such date.  If all of the shares of Series A Convertible Preferred Stock offered in the offering are sold and assuming such shares are converted into shares of common stock, these shares of common stock will represent approximately 57.4% of the outstanding shares of common stock as of the date of this prospectus.  Our shares of common stock and Series A Convertible Preferred Stock are presently not traded on any market or securities exchange, but should a market develop in our common stock, shares sold at a price below the current market price at which the common stock is trading will cause the market price to decline. Moreover, the offer or sale of a large number of shares at any price may likely cause the market price to fall.

Because we will be subject to the “Penny Stock” rules once our shares are quoted on the Over-The-Counter Bulletin Board, the level of trading activity in our shares of common stock may be reduced.

Broker-dealer practices in connection with transactions in “penny stocks” are regulated by penny stock rules adopted by the SEC. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and ask quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell these securities to persons other than established customers and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.
 
 
 
 

 
 
- 10 -



 
As a result of our registration statement being declared effective, of which this prospectus forms a part, we will be required to remain current in our filings with the SEC and our securities will not be eligible for quotation if we are not current in our filings with the SEC.

As a result of our registration statement being declared effective, of which this prospectus forms a part, we will be required to remain current in our filings with the SEC in order for the shares of our common stock to be eligible for quotation on the Over-The-Counter Bulletin Board.  In the event that we become delinquent in our required filings with the SEC, quotation of our common stock will be terminated following a 30 or 60 day grace period if we do not make our required filings during that time. If our shares are not eligible for quotation on the Over-The-Counter Bulletin Board, investors may find it difficult to sell their shares.

The offering price of $10.00 per share for the Series A Convertible Preferred Stock is speculative.

The offering price of $10.00 per share for the Series A Convertible Preferred Stock is fixed for the duration of the offering.  The offering price has been arbitrarily determined by our management and does not bear any relationship to the assets, net worth or actual or projected earnings of the Company or any other generally accepted criteria of value.

We do not pay any cash dividends.

We have not paid any cash dividends on our Series A Convertible Preferred Stock or common stock and we do not presently contemplate the payment of any dividends.  Accordingly, there can be no assurance that you will receive any return from an investment in our stock. In the absence of the payment of dividends, any return on your investment would be realized only upon your sale of our stock.  We are not making any representations that an investment in our stock will be profitable or result in a positive return; to the contrary, it may result in a complete loss of your investment.
 
 
Certain statements in this prospectus constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected revenues, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology.  Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements contained in this prospectus as a result of various factors, including, but not limited to, those described above under the heading “Risk Factors” and elsewhere in this prospectus. Before you invest in our securities, you should read this prospectus completely and with the understanding that our actual future results may be materially different from what we expect.
 
The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
 
 
 

 
 
- 11 -

 
 
 

 
 
Our principal reasons for conducting this offering at this time are to raise capital for furthering the development of our business, working capital and general corporate purposes.  We intend to use the proceeds of this offering for the payment of expenses associated with this offering, public company reporting requirements and our business operations, including corporate website development and updates, music production, marketing and promotional activities, executive compensation and general and administrative expenses.
 
We estimate that our net proceeds from the sale of the shares by us in this offering will be up to a maximum of $400,000, if all 40,000 shares of Series A Convertible Preferred Stock offered by this prospectus are sold and before deducting estimated offering expenses, and no proceeds, if none of the shares offered by this prospectus are sold.  We plan to prioritize the use the proceeds of this offering based upon various levels of sales of shares of the Series A Convertible Preferred Stock, as set forth in the following table.
 

   
If 25% of
Shares Sold
(10,000 Shares)
   
If 50% of
Shares Sold
(20,000 Shares)
   
If 75% of
Shares Sold
(30,000 Shares)
   
If 100% of
Shares Sold
(40,000 Shares)
                               
Offering Proceeds
 
$
100,000
   
$
200,000
   
$
300,000
   
$
400,000
                               
Offering Expenses:
                             
SEC Registration Statement
   
45
     
45
     
45
     
45
Edgarization and Printing
   
3,000
     
3,000
     
3,000
     
3,000
Accounting
   
5,300
     
5,300
     
5,300
     
5,300
Legal
   
37,000
     
37,000
     
37,000
     
37,000
Blue sky
   
2,000
     
2,000
     
2,000
     
2,000
Transfer Agent
   
2,500
     
2,500
     
2,500
     
2,500
Miscellaneous
   
155
     
155
     
155
     
155
                               
   Total Offering Expenses
   
50,000
     
50,000
     
50,000
     
50,000
                               
Operating Expenses:
                             
Music Download Website
   
5,000
     
7,500
     
8,500
     
10,500
Music Production
   
6,000
     
46,000
     
66,000
     
86,000
Marketing and Promotional Activities
   
-
     
14,000
     
24,000
     
36,000
Executive Compensation
   
6,000
     
6,000
     
26,000
     
39,500
Public Company Reporting
   
30,500
     
61,000
     
91,500
     
132,000
Transfer Agent 
   
 -
     
5,000
     
7,500
     
10,000
General and Administrative Expenses
   
2,500
     
10,500
     
26,500
     
36,000
                               
   Total Operating Expenses
   
50,000
     
150,000
     
250,000
     
350,000
                               
   Total Expenses
 
$
100,000
   
$
200,000
   
$
300,000
   
$
400,000

The foregoing represents our best estimate of the allocation of the proceeds of this offering based on the planned use of funds for our operations and current objectives.  Our management will have broad discretion in determining the uses of the net proceeds of this offering.  We may reallocate funds from time to time if our management believes such reallocation to be in our best interest for uses that may or may not have been herein anticipated.  Pending the use of the proceeds from this offering, we do not intend to place such proceeds in any interest bearing investments.
 
 
 

 

 
- 12 -


 
 
 

There is no public market for our shares of Series A Convertible Preferred Stock or our common stock.  We do not intend to develop a trading market for the Series A Convertible Preferred Stock.  There can be no assurance that a market in our common stock will develop, or, if such a trading market is developed, that it can be maintained with liquidity.  As of July 31, 2012, we have 10,000,000 shares of preferred stock authorized and none issued and 140,000,000 shares of common stock authorized, of which 8,160,000 shares are issued and outstanding.  None of the outstanding shares of common stock have been registered under the Securities Act, and all of which are deemed to be “restricted securities”, as that term is defined under Rule 144 promulgated under the Securities Act.  These shares will be available for sale in the public market subject to compliance with Rule 144 promulgated under the Securities Act or must be registered under the Securities Act. We currently have four shareholders of record of our shares of common stock and no holders of our Series A Convertible Preferred Stock.  As of the date hereof, we have not provided to any shareholder registration rights to register under the Securities Act any shares of our Series A Convertible Preferred Stock or common stock.

Sales of substantial amounts of common stock in the public market following the offering could have an adverse effect on the price of the common stock and may make it more difficult for us to sell shares of common stock in the future at times and for prices that we deem appropriate.  Following the offering and assuming all of the shares offered hereby are sold, we will have outstanding 40,000 shares of Series A Convertible Preferred Stock (or an additional 11,000,000 shares of common stock, if the shares of Series A Convertible Preferred Stock offered hereby are converted into shares of common stock), which will be freely tradable shares.

We currently plan to hire a securities broker to serve as our market maker by filing an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of the registration statement, of which this prospectus forms a part.  We anticipate that it may take approximately two months from the date of this prospectus for a market maker to file an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board, and that it may take approximately four months from the date of this prospectus for our common stock to be quoted on the Over-The-Counter Bulletin Board.  However, any application filed by a market maker on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board may not be approved.

The Penny Stock Rules

The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions. If our shares fall within the definition of a penny stock they will become subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse, excluding the value of one’s personal residence). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The penny stock rules may restrict the ability of broker-dealers to sell our securities and may affect the ability of our shareholders to sell our shares of common stock in the secondary market.

 
 
 

 
 
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The Series A Convertible Preferred Stock being offered by this prospectus does not carry a fixed periodic dividend. In the event a dividend is declared on our common stock, in cash or other property, the holders of the Series A Convertible Preferred Stock will be entitled to receive the amount of cash or property equal to the cash or property which would be received by the holders of the number of shares of common stock into which such shares of Series A Convertible Preferred Stock could be converted immediately prior to such dividend.  In the event that a dividend is declared by the Board of Directors on the Series A Convertible Preferred Stock, the terms of the Series A Convertible Preferred Stock do not require that a fixed amount be payable to such holders.  Also, there is no preference associated with the issuance of dividends on the Series A Convertible Preferred Stock.  We have not paid any dividends, and it is not anticipated that any dividends will be paid in the foreseeable future. The declaration and payment of dividends in the future will be determined by the Board of Directors in light of conditions then existing, including the company's earnings, financial condition, capital requirements and other factors.  We have not paid any dividends on our common stock, and it is not anticipated that any dividends on our common stock or Series A Convertible Preferred Stock will be paid in the foreseeable future. The declaration and payment of dividends in the future will be determined by the Board of Directors in light of conditions then existing, including the Company's earnings, financial condition, capital requirements and other factors.

 

Our management has arbitrarily determined the price of the shares of the Series A Convertible Preferred Stock we are offering for sale under this prospectus, as well as, the conversion price and the conversion ratio of the Series A Convertible Preferred Stock into common stock.  The offering price, conversion price and conversion ratio bear no relationship whatsoever to our assets, earnings, book value or other criteria of value. Among the factors considered were:
 
●     our lack of operating history;
 
●     the proceeds to be raised by the offering;
 
●     the amount of capital to be contributed by investors in this offering in proportion to the amount of stock to be
        retained by our existing shareholders; and
 
●     our relative cash requirements.


 
 
 
 
 
 
 
 
- 14 -


 
 
 
 
The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2012:
 
      on an actual basis; and
 
●      on a pro forma as adjusted basis to reflect the receipt by us of the net proceeds from the sale of 40,000 shares of the Series A Convertible Preferred Stock at a fixed public offering price of $10.00 per share for the duration of the offering, after deducting our estimated offering expenses, which are estimated to be $50,000, and the conversion of all 40,000 shares of Series A Convertible Preferred Stock into an aggregate of 11,000,000 shares of common stock.  We will convert the Series A Convertible Preferred Stock within 120 days of the consummation of the offering; however, at your option, you may convert the Series A Convertible Preferred Stock at any time prior thereto.  One share of Series A Convertible Preferred Stock will be converted at a conversion rate of 275 shares of common stock for each share of Series A Convertible Preferred Stock.

You should read the information set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus and our financial statements and related notes included elsewhere in this prospectus.

   
Actual
   
Pro Forma
As Adjusted
 
             
Cash and cash equivalents
  $ 11,048     $ 361,048  
Shareholders’ equity:
               
Series A Convertible Preferred Stock, $0.001 par value, 100,000 shares authorized, no shares issued and outstanding, actual and pro forma as adjusted
           
Preferred stock (other than Series A Convertible Preferred Stock), $0.001 par value, 9,900,000 shares authorized, no shares issued and outstanding, actual and pro forma as adjusted
           
Common stock, par value $.001 per share, 140,000,000 shares authorized, 8,160,000 shares issued and outstanding, actual; 100,000,000 shares authorized, 19,160,000 shares issued and outstanding, pro forma as adjusted
    8,160       19,160  
Additional paid-in capital
    9,600       398,600  
Deficit accumulated during the development stage
    (5,559 )     (55,559 )
                 
Total shareholders’ equity
    12,201       362,201  
                 
Total capitalization
  $ 12,201     $ 362,201  
 
 
 

 

 
- 15 -


 
 

 
 
Our net tangible book value as of March 31, 2012 was approximately $11,753, or $0.001 per share of common stock.  Net tangible book value per share represents total tangible assets less total liabilities, divided by the number of shares of common stock outstanding.  After giving effect to the issuance and sale by us of 25%, 50%, 75% and 100% of the shares of Series A Convertible Preferred Stock in this offering at the public offering price of $10.00 per share, which has been fixed for the duration of the offering, and after deducting our estimated offering expenses in the amount of $50,000, and the conversion of such shares into shares of common stock, our pro forma as adjusted net tangible book value per share as of March 31, 2012 would have been approximately $0.006, $0.012, $0.016, and $0.019 per share, respectively.  The following table illustrates this dilution to new investors on a per common share basis:
 
   
If 25% of
Shares Sold
(10,000 Shares)
   
If 50% of
Shares Sold
(20,000 Shares)
   
If 75% of
Shares Sold
(30,000 Shares)
   
If 100% of
Shares Sold
(40,000 Shares)
 
                                 
Pro forma public offering price per share after conversion(1)
  $ 0.036     $ 0.036     $ 0.036     $ 0.036  
                                 
Net tangible book value per share as of March 31, 2012
  $ 0.001     $ 0.001     $ 0.001     $ 0.001  
 
Increase per share attributable to new investors
  $ 0.030     $ 0.023     $ 0.019     $ 0.016  
                                 
Pro forma as adjusted net tangible book value per share after this offering
  $ 0.006     $ 0.012     $ 0.016     $ 0.019  
                                 
Dilution per share to new investors
  $ 0.031     $ 0.024     $ 0.020     $ 0.017  
__________________
 
(1)
Based upon the conversion formula of one share of Series A Convertible Preferred Stock into 275 shares of Common Stock.  We will convert the Series A Convertible Preferred Stock within 120 days of the consummation of the offering; however, at your option, you may convert the Series A Convertible Preferred Stock at any time prior thereto.
 
The following table sets forth as of March 31, 2012, on a pro forma as adjusted basis, the differences between (1) the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid, in each case by our existing shareholders, and (2) the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid, in each case by investors purchasing shares in this offering, based on the initial public offering price of $10.00 per share of Series A Convertible Preferred Stock and before deducting our estimated offering expenses.
 
    Shares Purchased       Total Consideration      
Average Price
 
    Number     Percent       Amount     Percent      
Per Share
 
                                   
Existing shareholders
  8,160,000     42.6 %     $ 17,760     4.3 %     $ 0.002  
New investors
  11,000,000     57.4 %     $ 400,000     95.7 %     $ 0.036  
Total
  19,160,000     100.0 %     $ 417,760     100.0 %          
 
 
 
 

 
 
- 16 -


 
 
 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements; and (ii) the section of this prospectus entitled “Description of Business” appearing elsewhere in this prospectus.
 
Overview

We are a company in the development stage.  The Company, through its wholly-owned subsidiary Astika Music Entertainment, Inc., engages in the music publishing business.  We own and acquire rights to musical compositions, exploit and market these compositions and receive royalties or fees for their use  from domestic and international sources.  Our primary activities through the date of this prospectus have been related to the acquisition and administration of 14 musical compositions, including the composer and arranger rights to four musical compositions from the 1981 Hollywood movie, Raiders of the Lost Ark, which we acquired at no cost from Mr. Settler on January 25, 2011, the engagement of two persons to write musical compositions as works for hire for us on an exclusive basis and preparing for this offering.  For the period January 13, 2011 (inception) through March 31, 2012, we have generated revenues in the amount of $1,660 and have an accumulated deficit in the amount of $5,559.  Based upon our working capital as of March 31, 2012 in the amount of $9,048, we require equity and/or debt financing to continue our operations.  If we are unable to obtain such additional financing on a timely basis, we may be forced to discontinue our operations and liquidate our assets.  See “Liquidity and Capital Resources” and “Availability of Additional Funds” below.

Plan of Operation
 
We are prioritizing the use the proceeds of this offering based upon various levels of sales of shares of the Series A Convertible Preferred Stock, as follows:
 
$100,000 Offering Proceeds (10,000 Shares, or 25% of Shares Sold)
 
Anticipated Milestones
 
Projected Date
of Completion
 
Estimated Budget
Allocation($)
           
Payment of Offering Expenses
 
September 2012
   
50,000
           
Development of Music Website, including downloads and music player
 
June 2013
   
5,000
           
Music Production for 3 Unpublished Compositions in Music Catalog
 
January 2013
   
6,000
           
Executive Compensation for Mr. Settler
 
0-12 Months
   
6,000
           
Public Company Reporting
 
0-12 Months
   
30,500
           
General and Administrative Expenses
 
0-12 Months
   
2,500
           
Total Expenditures
       
100,000
 
 
 
 
 
 
- 17 -

 
 
 
 
$200,000 Offering Proceeds (20,000 Shares, or 50% of Shares Sold)
 
Anticipated Milestones
 
Projected Date
of Completion
 
Estimated Budget
Allocation($)
           
Payment of Offering Expenses
 
September 2012
   
50,000
           
Development of Music Website, including downloads and music player
 
June 2013
   
5,000
           
Music Website Updates
 
0-24 Months
   
2,500
           
Music Production for 3 Unpublished Compositions in Music Catalog
 
January 2013
   
6,000
           
Music Production for 10 New
Musical Compositions in 2013
 
September 2013
   
20,000
           
Music Production for 10 New
Musical Compositions in 2014
 
June 2014
   
20,000
           
Marketing and Promotional Activities
 
0-24 Months
   
14,000
           
Executive Compensation for Mr. Settler
 
0-24 Months
   
6,000
           
Public Company Reporting
 
0-24 Months
   
61,000
           
Transfer Agent Expenses
 
0-24 Months
   
5,000
           
General and Administrative Expenses
 
0-24 Months
   
10,500
           
Total Expenditures
       
200,000
 
 
 
 
 
 
- 18 -

 

 
 
$300,000 Offering Proceeds (30,000 Shares, or 75% of Shares Sold)
 
Anticipated Milestones
 
Projected Date
of Completion
 
Estimated Budget
Allocation($)
           
Payment of Offering Expenses
 
September 2012
   
50,000
           
Development of Music Website, including downloads and music player
 
June 2013
   
5,000
           
Music Website Updates
 
0-36 Months
   
3,500
           
Music Production for 3 Unpublished Compositions in Music Catalog
 
January 2013
   
6,000
           
Music Production for 10 New
Musical Compositions in 2013
 
September 2013
   
20,000
           
Music Production for 10 New
Musical Compositions in 2014
 
June 2014
   
20,000
           
Music Production for 10 New
Musical Compositions in 2015
 
January 2015
   
20,000
           
Marketing and Promotional Activities
 
0-36 Months
   
24,000
           
Executive Compensation for Mr. Settler
 
0-36 Months
   
26,000
           
Public Company Reporting
 
0-36 Months
   
91,500
           
Transfer Agent Expenses
 
0-36 Months
   
7,500
           
General and Administrative Expenses
 
0-36 Months
   
26,500
           
Total Expenditures
       
300,000
 
 
 
 
 
 
- 19 -

 
 
 
 
$400,000 Offering Proceeds (40,000 Shares, or 100% of Shares Sold)
 
Anticipated Milestones
 
Projected Date
of Completion
 
Estimated Budget
Allocation($)
           
Payment of Offering Expenses
 
September 2012
   
50,000
           
Development of Music Website, including downloads and music player
 
June 2013
   
5,000
           
Music Website Updates
 
0-48 Months
   
5,500
           
Music Production for 3 Unpublished Compositions in Music Catalog
 
January 2013
   
6,000
           
Music Production for 10 New
Musical Compositions in 2013
 
September 2013
   
20,000
           
Music Production for 10 New
Musical Compositions in 2014
 
June 2014
   
20,000
           
Music Production for 10 New
Musical Compositions in Winter 2015
 
January 2015
   
20,000
           
Music Production for 10 New
Musical Compositions in Summer 2015
 
June 2015
   
20,000
           
Marketing and Promotional Activities
 
0-48 Months
   
36,000
           
Executive Compensation for Mr. Settler
 
0-48 Months
   
39,500
           
Public Company Reporting
 
0-48 Months
   
132,000
           
Transfer Agent Expenses
 
0-48 Months
   
10,000
           
General and Administrative Expenses
 
0-48 Months
   
36,000
           
Total Expenditures
       
400,000

The foregoing represents our best estimate of the allocation of the proceeds of this offering based on the planned use of funds for our operations and current objectives.  Our management will have broad discretion in determining the uses of the proceeds of this offering.  We may reallocate funds from time to time if our management believes such reallocation to be in our best interest for uses that may or may not have been herein anticipated.
 
 
 
 
 
- 20 -

 
 
 
 
 
We will require a minimum amount of $75,000 in proceeds from this offering to have an operating business and meet our public company reporting obligations for at least the next 12 months.  In the event that we do not raise at least $75,000 in proceeds from this offering, we will not have sufficient capital to allow us to execute our business plan and to meet our public company reporting requirements for the next 12 months and, accordingly, we will need to obtain additional equity and/or debt financing for which no sources may exist.  If we are unable to raise at least $75,000 in proceeds from this offering and/or obtain such minimum amount in combination with other potential sources of equity and/or debt financing on a timely basis, we will become insolvent and forced to discontinue our operations and liquidate our assets.
 
Period from January 13, 2011 (Inception) through December 31, 2011
 
Revenues.  Revenues consisted of performance royalties from our music catalog.  For the period January 13, 2011 (inception) through December 31, 2011, revenues were $834, which was comprised of performance royalty payments from Broadcast Music Inc. (BMI) on the composer and arranger rights to musical compositions our catalog.

General and Administrative Expenses.  General and administrative expenses consisted primarily of corporate support expenses, such as legal and accounting, and director stock compensation expenses.  For the period January 13, 2011 (inception) through December 31, 2011, general and administrative expenses were $4,743. These general and administrative expenses were due primarily to professional fees relating to this offering.  We expect that our general and administrative expenses will continue to increase as we incur additional costs to support the growth in our business.  We anticipate that costs relating to maintaining our status as a public reporting company and filing reports with the SEC will be approximately $30,500 to $33,000 per year.
 
Three months ended March 31, 2012 compared with the period from January 13, 2011 (Inception) through March 31, 2011

Revenues.  Revenues consist of performance royalties from our music catalog.  For the three months ended March 31, 2012, revenues increased by $826, as compared to the period January 13, 2011, our inception, through March 31, 2011, for which revenues were $0.  The increase in revenues was due to the performance royalty payments from Broadcast Music Inc. (BMI) on the composer and arranger rights to the musical compositions in our catalog.  
 
General and Administrative Expenses.  General and administrative expenses consisted primarily of corporate support expenses such as legal and accounting, and director stock compensation expenses.  For the three months ended March 31, 2012, general and administrative expenses increased by $2,442, as compared to the period January 13, 2011, our inception, through March 31, 2011. The increase in general and administrative expenses was due primarily to the increase in professional fees relating to this offering.  We expect that our general and administrative expenses will continue to increase as we incur additional costs to support the growth in our business.  We anticipate that costs relating to maintaining our status as a public reporting company and filing reports with the SEC will be approximately $30,500 to $33,000 per year.
 
Liquidity and Capital Resources

We measure our liquidity in a number of ways, including the following:

 
As of
December 31, 2011
   
As of
March 31, 2012
 
           
           
Cash
  $ 8,033     $ 11,048  
Working Capital
    8,033       9,048  
Debt (current)
    -       2,000  

From January 13, 2011 (inception) through March 31, 2012, we raised a total of $17,400 from the issuance of common stock.
 
 

 
 
- 21 -




 
Net Cash Used in Operating Activities

We experienced negative cash flow from operating activities for the period January 13, 2011, our inception, through March 31, 2012 in the amount of $3,054.  The cash used in operating activities during this period was due to cash used to fund a net loss of $5,559, adjusted for non-cash expenses related to amortization of intangible assets, depreciation on equipment, issuance of common stock to directors for services, as well as the increase in accounts payable for legal services in the amount of $2,000.
 
Net Cash Used in Investing Activities

We experienced negative cash flow from investing activities for the period January 13, 2011, our inception, through March 31, 2012 in the amount of $3,298.  The cash used in investing activities during this period was due to cash used to purchase equipment.
 
Net Cash Provided by Financing Activities
 
Cash provided by financing activities for the period from January 13, 2011, our inception, through March 31, 2012 was $17,400, which resulted from the issuance of common stock.
 
Availability of Additional Funds
 
Based on our limited working capital as of March 31, 2012 and minimal revenues, we require equity and/or debt financing to continue our operations.  We expect that our current cash on hand will fund our operations through December 2012.  Due to the impending lack of funds, we will need to raise further capital, through the sale of additional equity securities or otherwise, to support our operations.  Our operating needs include the costs to operate our business, including amounts required to fund working capital and capital expenditures.  Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully increase our royalties in the music publishing business that we recently entered in June 2012.  See “Description of Business”.

We may be unable to raise sufficient additional capital when we need it or to raise capital on favorable terms. Debt financing may require us to pledge certain assets and enter into covenants that could restrict certain business activities or our ability to incur further indebtedness, and may contain other terms that are not favorable to our shareholders or us. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or to obtain funds by entering into financing agreements on unattractive terms.

These matters raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements included elsewhere in this prospectus have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.  The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values.  The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 
 
 

 
- 22 -



 
Critical Accounting Policies and Estimates
 
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from these estimates. Our significant estimates and assumptions include amortization, the fair value of our stock, and the valuation allowance relating to the Company’s deferred tax assets.
 
We qualify as an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012.  Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
 
Recently Issued Accounting Pronouncements

Reference is made to the “Recent Accounting Pronouncements” in Note 2 to our consolidated financial statements included elsewhere in this prospectus for information related to new accounting pronouncements, none of which had a material impact on our consolidated financial statements.
 
Off Balance Sheet Arrangements
 
As of March 31, 2012 and December 31, 2011, we had no off balance sheet arrangements.
 
 
Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1) of Regulation S-K.
 
 
 
 
 

 
- 23 -


 
 
 

Our Company

Astika Holdings, Inc., a Florida corporation, is a music publishing company in the development stage.  We own and acquire rights to musical compositions, exploit and market these compositions and receive royalties or fees for their use from domestic and international sources.   We have a total of 14 original musical compositions in our catalog as of the date of this prospectus, of which 11 compositions have been published.  Our music catalog includes the composer/arranger rights in four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which Eugene B. Settler, our Chairman, President, Chief Executive Officer, Treasurer and a staff songwriter, assigned and transferred to us at no cost on January 25, 2011.  The composer/arranger rights to these musical compositions have been reflected on the records of the performing rights society Broadcast Music Inc. (BMI).  We also have a copyrighted recorded music compilation consisting of seven musical compositions that we acquired for $5,000 on June 15, 2012, from EuGene Gant, one of our exclusive songwriters, entitled, “Eugenius SOL Presents:  Green and Healthy”, which is available for sale on the Internet website www.alephmusic.com.  We own the copyrights on the remaining three musical compositions in our catalog, which were delivered to us on July 1, 2012, without any advance payment, pursuant to an exclusive songwriter agreement that we have with Mr. Settler dated June 16, 2012.  However, these three musical compositions have not yet been published in any media or format.  During the period from January 13, 2011, our inception, through March 31, 2012, we generated revenues in the amount of $1,660 and have an accumulated deficit in the amount of $5,559.
 
Our company structure is set forth in the following chart:

ASTIKA HOLDINGS, INC.
a Florida corporation
 
 
ASTIKA MUSIC ENTERTAINMENT, INC.
a Florida corporation
(100% Owned Subsidiary)

We are not a “blank check company”, because we believe that we do not meet the definition of a company that has no specific business plan or purpose or has indicated its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity or person.  The Company, its officers and directors, promoters or any of their affiliates, do not intend, once the Company is reporting, for it to be used as a vehicle for a private company to become a reporting company.
 
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, which became law in April, 2012.  Under the JOBS Act, “emerging growth companies”, can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
 
Our independent auditors have raised substantial doubt as to our ability to continue as a going concern, as expressed in its opinion on our financial statements included in this prospectus.  Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and/or obtain the necessary financing to meet our obligations and repay our liabilities as they arise.  There can be no assurance that we will operate at a profit or such additional financing will be available, or if available, can be obtained on satisfactory terms.

Our principal executive offices are located at 7000 W. Palmetto Park Road, Suite 409, Boca Raton, Florida  33433.  Our telephone number is (509) 562-3211.  We were incorporated under the laws of the State of Florida on January 13, 2011.  Our fiscal year end is December 31.

Principal Products
 
Our music catalog is comprised of 14 musical compositions as of the date of this prospectus.  We believe that we will be able to add new musical compositions to our catalog through the efforts of our songwriters, and the selective acquisition of rights in musical compositions. However, we can provide no assurance that our songwriters will write new musical compositions for us or that we will be able to acquire copyrights or other rights in musical compositions.  We are completely dependent on the efforts of Mr. Settler, our sole executive officer with a music industry background, for all of the decisions involving our music publishing business, including decisions to have us publish and acquire musical compositions that may or may not generate royalties for us or enable us to operate our music publishing business profitably.  We entered the music publishing business in June 2012, and have not operated our music publishing business profitably as of the date of this prospectus.We can provide no assurance that we will be able to exploit our musical compositions in our catalog to such an extent, so that we generate enough royalties on them to become profitable.  See “Risk FactorsRisks Related To Our Financial Condition and Business Model.”
 
 
 
 
 
- 24 -

 
 
 
 
On June 25, 2011, we acquired the composer/arranger rights in four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which are as follows:  Dallou A; Finshabi; I M Schwarzen; Walfisch Zu Aska and Ma Bihwa Gayrak, pursuant to a Bill of Sale and Assignment dated January 25, 2011, from Mr. Settler at no cost.  BMI has charged us $500 as an administrative processing fee to record the assignment of the rights to these compositions and there were no other charges or payments made for the rights associated with these compositions.
 
On June 15, 2012, we acquired the copyrights to seven original musical compositions from EuGene Gant, the songwriter, which is on the recorded music compilation entitled, “Eugenius SOL Presents:  Green and Healthy”, and is available for sale as a digital download on the Internet website www.alephmusic.com.  We purchased this recorded music compilation from him for a purchase price of $5,000 pursuant to a Bill of Sale and Assignment dated June 15, 2012, an Exclusive Songwriter Agreement dated June 15, 2012, and a Promissory Note that we concurrently executed and delivered to him on the same date.  We made a payment to Mr. Gant in the amount of $1,000 on June 15, 2012, and the Promissory Note in the principal amount of $4,000 bears interest at five percent (5%) per annum, and has principal installment payments in the amount of $2,000 due on October 1, 2012 and June 15, 2013.  We are entitled to the mechanical royalties, for a period 50 years, or until June 15, 2062, from the sale of this recorded music compilation.  After the expiration of such 50-year period, the copyrights on these musical compositions revert to Mr. Gant or his heirs or assigns.  For the period June 15, 2012 through July 31, 2012, this recorded musical compilation was purchased by 13 unique purchasers as a digital download, which generated mechanical royalties for us in the amount of $130, or $10 per unit, and we pay Mr. Gant 50% of the net sums that we collect, as a writer’s fee for these musical compositions.
 
On July 1, 2012, we acquired the copyrights to three original musical compositions, which were written for us as works for hire pursuant to a five year exclusive songwriter agreement that we have with Mr. Settler dated June 16, 2012, and which expires on June 16, 2017.  We have not yet produced final versions of these musical compositions or published them and, therefore, cannot predict whether we will generate any royalties on these compositions.
 
Songwriter Agreements
 
On June 15, 2012, the Company entered into a songwriter agreement with EuGene Gant, a songwriter, which provides for Mr. Gant’s employment as a staff writer on an exclusive basis to write musical compositions as works for hire for a period of two years from the date of the agreement. This agreement expires on June 15, 2014. The exclusive songwriter agreement with Mr. Settler dated June 16, 2012, provides for Mr. Settler’s employment as a staff writer on an exclusive basis to write musical compositions as works for hire for a period of five years from the date of the agreement.  This agreement expires on June 16, 2017.  During Mr. Gant’s and Mr. Settler’s tenure as songwriters for us, the copyrights on their entire work product will belong to us, in exchange for our assistance in exploiting and marketing these compositions and the payment of a writer’s fee to them ranging from 10% to 50% of the net amounts that we collect on these musical compositions.  We are entitled to the royalties for a period 50 years from the date of the creation of any work for hire pursuant to such agreements.  After the expiration of such 50-year period, the copyright on a musical composition reverts to the songwriter or his heirs or assigns.
 
In the event that we enter into other contracts with other composers and lyricists, those contracts may grant either 100% or some lesser percentage of the ownership interests in a musical composition. In other instances, those contracts may only convey to us rights to administer musical compositions or collect performance royalties for a period of time without conveying an ownership interest in a musical composition.  Contracts may grant us exclusive exploitation rights in the territories concerned or on a worldwide basis excepting any pre-existing arrangements.  Contracts may also cover the entire work product of the writer or composer, or a portion thereof, for the duration of the contract.  Contract terms will be negotiated on an arms-length basis and the terms of each contract we expect will vary and will be dependent, among other things, on our available cash, the cash that we can generate from our business activities, and our ability to negotiate payment terms with such songwriters.  Notwithstanding the foregoing, we can provide no assurance that we will be able to enter into other contracts with other composers and lyricists or whether any contracts that we may enter into will be to our benefit, or that the terms of any of these contracts will be favorable to us.
 
Music Publishing Royalties
 
Music publishers generally receive royalties pursuant to mechanical (i.e., sale of recorded music in various formats, including digital downloads from an Internet website), performance (i.e., performance of a song to the general public) and synchronization (i.e., use of a song in combination with visual images) fee arrangements and licenses for sheet music.  To date, the only types of royalties or fees that we earn on our music catalog are performance royalties and mechanical royalties, because the only royalty arrangements that we have are for (i) the composer and arranger rights, but not the copyrights, on the four compositions included in the Raider of the Lost Ark movie that have generated performance royalties for us since January 2011, and (ii) the copyrights on the musical compositions included in the recorded music compilation entitled, “Eugenius SOL Presents: Green and Healthy”, that have only recently begun generating mechanical royalties since June 15, 2012, from the digital downloads on website, www.alephmusic.com. Each unit is being sold for a purchase price in the amount of $10 per download.  Mr. Gant is the owner and administrator of this website and is letting us sell this recorded music compilation on his website on an at will basis at no charge.  We have no other royalty arrangements for the musical compositions in our music catalog.
 
 
 
 
 
- 25 -

 
 
 
 
 

 
In the U.S., the statutory rates for mechanical royalties are established by the U.S. Copyright Act of 1976, as amended, for the royalty rates applicable to musical compositions for sales of recordings embodying those musical compositions. In the U.S., public performance royalties are typically administered and collected by performing rights societies, such as BMI, and in most countries outside the U.S., collection, administration and allocation of both mechanical and performance income are undertaken and regulated by governmental or quasi-governmental authorities. Throughout the world, each synchronization license is generally subject to negotiation with a prospective licensee and, by contract, music publishers pay a contractually required percentage of synchronization income to the songwriters or their heirs and to any co-publishers.
 
Sales and Marketing

Initially, we are using Mr. Gant’s website, www.alephmusic.com, to sell digital downloads of the recorded music that includes the musical compositions that he writes on our behalf, which at this time the only musical compositions that he has written on our behalf are on the recorded music compilation entitled, “Eugenius SOL Presents: Green and Healthy”.  There are other musical compositions on this website that we do not own.  Any recorded musical compositions that Mr. Gant writes on our behalf or that are published and available for sale as digital downloads are being included on this website on at will basis determined solely by us and Mr. Gant.  Until such time as we develop our own website, we cannot provide any assurance that we will be able to continue to make additional recorded music that includes our musical compositions available for sales as digital downloads.  We also cannot determine at this time whether we will add additional recorded music or printed sheet music to this website.  Upon the completion of the offering, we intend to commence the preparation of a website featuring our musical compositions that will also be capable of providing for digital downloads and sheet music purchases and a shopping cart and payment mechanism for purchasing digital downloads from this website, including a music player for listening to the recorded music that we plan to sell on the website.  We anticipate that it will take up to six months from the completion of the offering for this music download website to be fully functional with the features that we are planning to offer.  We have not yet purchased a domain name for this website.
 
We plan to market our music catalog to prospective licensees such as recorded music companies, filmed entertainment, television and other media companies, advertising and media agencies, event planners and organizers, computer and video game companies and other multimedia producers in an attempt to attract additional sources of royalties for our music catalog. We also plan to market and sell musical compositions in the form of printed sheet music.  However, to date, we have not successfully engaged in any of the foregoing activities and cannot provide any assurance as to the level of success or failure that we may have in any such activities.
 
Distribution

We rely on Mr. Settler, our President, Chief Executive Officer and Treasurer, to attract licensing opportunities for the musical compositions contained in our music catalog.  Mr. Settler has been involved in distribution, sales and marketing and executive positions with companies in the music industry and has relationships that he has cultivated in these positions and others throughout his career, which we believe will be valuable in attracting additional licensing opportunities and expanding the distribution of our music catalog.  See “Directors, Executive Officers, Promoters and Control Persons” and “Risk FactorsRisks Related To Our Financial Condition and Business Model.”
 
Competition
 
The music publishing business is highly competitive and has low barriers to entry. In 2011, the top four music publishers collectively accounted for approximately 67.3% of the market based on domestic and international music publishing revenues. Based on Music & Copyright’s recent estimates published in May 2012, Universal Music Publishing Group was the market leader in music publishing in 2011, holding a 22.2% share. EMI Music Publishing was the second largest music publisher with a 19.3% share, followed by Warner Music Group (Warner/Chappell) at 14.1% and Sony/ATV Music Publishing LLC at 11.7%. Independent music publishers, as well as many individual songwriters who publish their own works, represent the balance of the market with a 32.6% share.

We primarily compete with other music publishers, substantially all of which have greater experience, brand name recognition and financial resources than us.   We also compete with songwriters that publish their own works.  We believe that our competitive strength lies with Mr. Settler serving as our chief executive officer and president.  We believe that Mr. Settler’s knowledge, experience and industry contacts gained by working extensively in the music business for publishers and independent and major record labels will allow us to compete effectively and differentiate ourselves from other competitors in the marketplace.  See “Directors, Executive Officers, Promoters and Control Persons”.

Intellectual Property

Our business, like that of other companies and songwriters  involved in music publishing, rests on our ability to maintain rights in musical compositions.  We consider the musical compositions in our catalog to be valuable assets to our business.  We own the songwriter rights to the musical compositions contained in our music catalog.  However, we do not own any copyrights on such music.  We also consider our trademarks to be valuable assets to our business. As such, we may seek to register our trademark, “Astika Music Entertainment” and any other trademarks where we believe the protection of them is important for our business.  We currently do not have any federally registered trademarks.
 
 
 

 
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Government Regulation

We are subject to government regulations that regulate businesses generally, such as compliance with regulatory requirements of federal, state, and local agencies and authorities, including regulations concerning workplace safety and labor relations.  In addition, our operations are affected by federal and state laws relating to marketing practices in the music industry.  Environmental laws and regulations do not materially impact our operations.

Research and Development

We have not spent any funds on research and development activities in connection with our business.

Employees

As of July 31, 2012, we employed three persons, two on a full-time basis and one on a part-time basis.  None of our employees is subject to a collective bargaining agreement. We believe that our relationship with our employees is good.


We occupy an approximately 800 square foot space located in Boca Raton, Florida, for office space, which is currently being provided to us at no charge.  We believe that this space is presently adequate for our needs.
 
 
We are not a party to any material legal proceedings nor are we aware of any legal proceedings pending or threatened against us or our properties.
 
 
The following table sets forth the name, age and position of each of our current executive officers and directors.
 
Name
 
Age
 
Principal Positions With Us
Eugene B. Settler
 
76
 
Chairman of the Board, Chief Executive Officer, President and Treasurer
Jack M. Alvo
 
49
 
Secretary and Director
Stephen J. Ratelle
 
54
 
Director
 
The following describes the business experience of each of our directors and executive officers, including other directorships held in public reporting companies, if any:
 
Eugene B. Settler - Chairman of the Board, Chief Executive Officer, President and Treasurer

Mr. Settler has served as our Chairman of the Board, Chief Executive Officer, President and Treasurer since January 2011 on a full-time basis.  Since June 2012, Mr. Settler has also served as an exclusive songwriter writing musical compositions for us on a work for hire basis.  From April 1997 until January 2011, Mr. Settler served as president of Setco, Inc., a company engaged in the marketing and licensing of musical compositions and recorded music.  From April 1996 until September 2006, Mr. Settler served as an independent consultant for Golden Entertainment Corp., a company engaged in the marketing and licensing of musical compositions and recorded music.  From May 1988 until March 1996, Mr. Settler served as the president and chief operating officer of The Singing Machine Company, Inc., a public reporting company engaged in the development, production, marketing and distribution of consumer karaoke audio equipment, accessories and recorded music, and also as a director from May 1988 until March 1997, a few weeks prior to the company’s Chapter 11 bankruptcy filing in April 1997.  From May 1981 until May 1988, Mr. Settler served as president and chief executive officer of IJE International, Inc., d/b/a Kid Stuff Records, a company engaged in the marketing and licensing of recorded kids music and books.  From August 1976 until April 1981, Mr. Settler served as president and chief executive officer of Request International Records, a record label.  From June 1972 until March 1976, Mr. Settler served as executive vice president of Transcontinental Music Corp., a company engaged in the retail sale of recorded music and musical instruments.  From May 1970 until June 1972, Mr. Settler served as executive vice president of domestic marketing and distribution of RCA Records, Inc., a record label.  From April 1968 until May 1970, Mr. Settler served as the director of marketing of Epic Records, a division of CBS Records, Inc., a record label.  From April 1965 through April 1968, Mr. Settler served as the branch manager of Columbia Records for Northern Ohio, a record label.  We believe that Mr. Settler should serve as a member of our board of directors due to his extensive music industry experience and contacts and prior experience serving as an officer and director of a public reporting company.
 
 

 

 
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Jack M. Alvo – Secretary and Director

Mr. Alvo has served as a Director of the Company since March 2012, and since June 2012, as Secretary of the Company on a part-time basis for which he devotes up to five hours per week.  Since December 2010, Mr. Alvo has served as a sales manager of TLR Energy, an energy management consulting firm.  From March 2008 until November 2009, Mr. Alvo served as a senior trader for Rochoet NY Inc., a precious metals trading company.  From December 2004 until March 2008, Mr. Alvo served as an associate broker of Prudential Douglas Elliman Real Estate, New York, a real estate brokerage firm.  From May 2003 until August 2003, Mr. Alvo served as a trader for Worldco, L.L.C., a securities brokerage firm.  From January 2003 until February 2003, Mr. Alvo served as a trader for Andover Brokerage, L.L.C., a securities brokerage firm.  From February 2002 until January 2003, Mr. Alvo was vice president of sales at Act Forex, a foreign exchange trading software company. From September 1999 until January 2002, Mr. Alvo served as a financial advisor for Morgan Stanley DW Inc., a securities brokerage firm.  From April 1998 until August 1998, Mr. Alvo served as a trader for Murphy & Durieu, a securities brokerage firm.  From December 1994 until April 1998, Mr. Alvo served as a proprietary trader for Schonfeld Securities, LLC, a securities brokerage firm.  From June 1990 until March 1994, Mr. Alvo served as a foreign currency exchange broker for Tullett & Tokyo Securities, Inc., one of the world’s largest inter-dealer brokers.  From June 1998 until April 1990, Mr. Alvo served as a NYSE exchange floor clerk for Murphy & Durieu.  From December 1986 until March 1988, Mr. Alvo served as an AMEX exchange floor clerk for Gintelco, Inc., a securities brokerage firm.  Mr. Alvo graduated from Babson College in 1986 with a Bachelor’s of Science degree in Finance and Entrepreneurial Studies.  We believe that Mr. Alvo should serve as a member of our board of directors due to his experience in the financial services industry and educational background.

Stephen J. Ratelle - Director

Mr. Ratelle has served as a Director of the Company since March 2012.  From February 2006 to May 2007, Mr. Ratelle served as chief executive officer, chief financial officer, treasurer, secretary and on the board of directors of Tundra Resources, Inc., a public reporting company, and during Mr. Ratelle’s tenure, this company did not comply with its public company reporting obligations under the Exchange Act.  From August 2009 to June 2010, Mr. Ratelle served as president of Environtech, Inc.  Mr. Ratelle was employed as a project manager, general foreman and superintendent for Fisk Electric from August 2006 to August 2009.  Mr. Ratelle was employed as a project manager and general foreman for Rosendin Electric from February 2005 to August 2006.  Mr. Ratelle was employed as a project manager and general foreman for Acme Electric from November 2001 to February 2005.  Mr. Ratelle was employed as a project manager and general foreman for Mojave Electric from January 1989 to October 2001.  We believe that Mr. Ratelle should serve as a member of our board of directors due to his prior experience serving as an officer and director of a public reporting company and his prior experience in manager and other supervisory positions.
  
Term of Office
 
All of our directors hold office until the next annual meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.
 
Family Relationships
 
There are no family relationships among any of the Company’s directors and officers.
 
Board Composition and Committees

The Company’s Board of Directors is currently composed of three members, Eugene B. Settler, Jack M. Alvo and Stephen J. Ratelle.

We do not have a standing nominating, compensation or audit committee.  Rather, our full board of directors performs the functions of these committees. Also, we do not have a “audit committee financial expert” on our board of directors as that term is defined by Item 407(d)(5)(ii) of Regulation S-K. We do not believe it is necessary for our board of directors to appoint such committees because the volume of matters that come before our board of directors for consideration permits the directors to give sufficient time and attention to such matters to be involved in all decision making.
 
 
 
 
 

 
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Code of Ethics

Our Board of Directors will adopt a code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. The code will address, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. 
 
Involvement in Certain Legal Proceedings
 
Except for the petition for bankruptcy by Mr. Alvo under Chapter 7 of the Federal bankruptcy laws filed on June 18, 2010 in the U.S. Bankruptcy Court for the Southern District of New York and the subsequent discharge of Mr. Alvo by the Court from all dischargeable debts on October 4, 2010, none of our directors, executive officers or control persons has been involved in any of the events prescribed by Item 401(f) of Regulation S-K during the past ten years, including:
 
1.  
any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;
 
2.  
any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
 
3.  
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:
 
i.  
acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
 
ii.  
engaging in any type of business practice; or
 
iii.  
engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
 
4.  
being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;
 
5.  
being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
 
 
 
 

 
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6.  
being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
 
7.  
being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
 
i.  
any Federal or State securities or commodities law or regulation; or
 
ii.  
any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
 
iii.  
any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
 
8. 
being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
 
 
Compensation Discussion and Analysis
 
Philosophy and objectives
 
Since our inception, all compensation decisions have been made by our Board of Directors.  The primary objective of our compensation policies and programs with respect to executive compensation is to serve our shareholders by attracting, retaining and motivating talented and qualified individuals to manage and lead our business. We will focus on providing a competitive compensation package that provides significant short and long-term incentives for the achievement of measurable corporate and individual performance objectives.
 
Elements of executive compensation
 
Base salary.  We will seek to provide our senior management with a level of base salary in the form of cash compensation appropriate to their roles and responsibilities.  Base salaries for our executives will be established based on the executive’s qualifications, experience, scope of responsibilities, future potential and past performance and cash available to pay executive compensation. Base salaries will be reviewed annually and adjusted from time to time to realign salaries with market levels after taking into account an individual's responsibilities, performance and experience. We will consider four factors in determining the base salaries of our named executive officers. These four factors are, in order of significance, (1) creating an incentive to achieve corporate goals, (2) individual performance, (3) cash available to pay compensation and (4) the total compensation each executive officer previously received while employed with us, if any.  We have not paid any executive compensation in the form of base salary to our management.
 
 
 
 

 
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Incentive cash bonuses.  Our practice will be to seek to award incentive cash bonuses to our executive officers based upon their individual performance, as well as our overall business and strategic objectives. In determining the amount of cash bonuses paid to our named executive officers, we will consider the same four factors as in determining their base salaries. We expect that our Board of Directors will adopt formal processes for incentive cash bonuses during the next 24 months and will utilize incentive cash bonuses to reward executives for achieving corporate financial and operational goals and for achieving individual performance objectives.  We have not paid any incentive cash bonuses to our management.
 
Long-term equity compensation.  We believe that successful long-term performance is achieved through an ownership culture that encourages long-term performance by our executive officers through the use of stock and stock-based awards. We intend to establish equity incentive plans to provide our employees, including our executive officers, with incentives to help align those employees’ interests with the interests of our shareholders. We expect that our incentive plans will permit the grant of stock options, restricted shares and other stock awards to our executive officers, employees, consultants and non-employee board members. When we hire executive officers in the future, we expect to grant them stock-based awards that will generally vest over a five-year period. We believe that stock-based awards provide an incentive for these officers to continue their employment with us, provide our executive officers with an opportunity to obtain an ownership interest in our company and encourage them to focus on our long-term profitable growth. We believe that the use of long-term equity compensation will promote our overall executive compensation objectives and expect that equity incentives will be an important source of compensation for our executives.  In determining amounts awarded to our executive officers under our incentive plans, we will consider the same four factors (and use the same method of measurement) as in determining base salary. The third factor (cash available) has an indirect effect when determining long-term equity compensation. Specifically, to the extent that this factor causes us not to pay base salary or cash bonuses, it points toward providing long-term equity compensation.  We have not issued any long-term equity compensation to our management.
 
Other compensation.  When we hire executive officers, our executive officers will be eligible to receive the same benefits, including non-cash group life and health benefits that are available to all employees. We may offer a 401(k) plan to our employees, including our executive officers. This plan will permit employees to make contributions up to a statutory maximum and will permit us to make matching or profit-sharing contributions. To date, we have not offered to our employees any benefit plans, including but not limited a 401(k) plan or made, or committed to make, any matching or profit-sharing contributions under a 401(k) plan.
 
Policies related to compensation
 
Guidelines for equity awards.  We have not formalized a policy as to the amount or timing of equity grants to our executive officers. We expect, however, that our board of directors will approve and adopt guidelines for equity awards.  Among other things, we expect that the guidelines will specify procedures for equity awards to be made under various circumstances, address the timing of equity awards in relation to the availability of information about us and provide procedures for grant information to be communicated to and tracked by our finance department.  As of the date of this prospectus, we have not established a finance department.  We anticipate that the guidelines will require that any stock options or stock appreciation rights have an exercise or strike price not less than the fair market value of our common stock on the date of the grant.
 
Stock ownership guidelines.  As of the date of this prospectus, we have not established stock ownership guidelines for our executive officers or the Board of Directors.
 
 
 
 
 

 
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Compliance with Sections 162(m) and 409A of the Internal Revenue Code
 
Section 162(m) of the Internal Revenue Code limits the deductibility of compensation in excess of $1 million paid to certain executive officers, unless such compensation qualifies as performance-based compensation. Among other things, in order to be deemed performance-based compensation for Section 162(m) purposes, the compensation must be based on the achievement of pre-established, objective performance criteria and must be pursuant to a plan that has been approved by our shareholders. At least for the next several years, we expect the cash compensation paid to our executive officers to be below the threshold for non-deductibility provided in Section 162(m), and our equity incentive plans will afford our board of directors with the flexibility to make a variety of types of equity awards to our executive officers, the deductibility of which will not be limited under Section 162(m).  However, our board of directors will fashion our future equity compensation awards.  However, we do not now know whether any such awards will satisfy the requirements for deductibility under Section 162(m).
 
We also currently intend for our executive compensation program to satisfy the requirements of Internal Revenue Code Section 409A, which addresses the tax treatment of certain nonqualified deferred compensation benefits.

Executive Compensation

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by, or paid to the Company’s officers during the period from January 13, 2011 (inception) to December 31, 2011 and during the three month period ended March 31, 2012 for services to the Company.
 
Name
 
Position
 
Year
Ended
&
Period
Ended
 
Salary
Paid ($)
 
Bonus ($)
 
Stock
Awards ($)
 
Option
Awards ($)
 
Non-
Equity
Incentive
Plan
Compensation ($)
 
All
Other
Compensation ($)
 
Total ($)
                                     
Eugene B. Settler
 
CEO
 
2011
 
-
 
-
  -  
-
 
-
 
-
 
-
       
2012
 
-
 
-
 
-
 
-
 
-
 
-
 
-
Jack M. Alvo (1)
 
Secretary
 
2011
 
-
 
-
 
-
 
-
 
-
 
-
 
-
       
2012
 
-
 
-
 
180
 
-
 
-
 
-
 
180
___________

(1)    
Mr. Alvo became the Secretary of the Company in June 2012.  Mr. Alvo was issued 60,000 shares of common stock on March 31, 2012.  The Company recorded such stock issuance as shares valued at $0.003 per share, which was the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

 
 
 
 
 

 
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Compensation of Directors

The following table sets forth the information concerning cash and non-cash compensation awarded to, earned by, or paid to the Company’s directors during the period from January 13, 2011 (inception) to December 31, 2011 and during the three month period ended March 31, 2012 for services to the Company:
 
Name
 
Year
Ended
&
Period
Ended
 
Fees
Earned
or Paid
in Cash ($)
 
Stock
Awards ($)(2)
 
Option
Awards ($)
 
Non-
Equity
Incentive
Plan
Compensation ($)
 
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings ($)
 
All Other
Compensation ($)
 
Total ($)
                                 
Eugene B. Settler
 
2011
 
-
 
-
 
-
 
-
 
-
 
-
 
-
   
2012
  -
 
-
 
-
 
-
 
-
 
-
 
-
Jack M. Alvo (1)
 
2012
 
-
 
180
 
-
 
-
 
-
 
-
 
180
                                 
Stephen J. Ratelle(1) 
 
2012
  -
 
  180
  -
 
-
 
-
 
-
 
180
___________

(1)  
Mr. Alvo and Mr. Ratelle were both appointed as directors of the Company in March 2012.

(2)  
The Company recorded the stock issuance of 60,000 shares of common stock as shares valued at $0.003 per share, which was the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

Employment Agreements and Benefits

We currently have three employees.  Mr. Gant and Mr. Settler have exclusive songwriter agreements with us.  There are no executive employment agreements with us.  See “Description of Business−Musical Composition Agreements” for additional information.

Potential Payments Upon Termination or Change in Control

As of the date of this prospectus, there were no potential payments or benefits payable to our executive officers, upon their termination or in connection with a change in control.

Pension Benefits

No named executive officers received or held pension benefits during the period from January 13, 2011 (inception) to December 31, 2011 or the three month period ended March 31, 2012.

Nonqualified Deferred Compensation

No nonqualified deferred compensation was offered or issued to any named executive officer during the period from January 13, 2011 (inception) to December 31, 2011 or the three month period ended March 31, 2012.

Grants of Plan-Based Awards

During the period from January 13, 2011 (inception) to December 31, 2011 and the three month period ended March 31, 2012, we have not granted any plan-based awards to our executive officers.

Outstanding Equity Awards

No unexercised options or warrants were held by any of our named executive officers as of December 31, 2011 or the three month period ended March 31, 2012.  No equity awards were made during the fiscal year ended December 31, 2011 or the three month period ended March 31, 2012.

Option Exercises and Stock Vested

During the period from January 13, 2011 (inception) to December 31, 2011 and the three month period  ended March 31, 2012, our executive officers have neither been granted any options, nor did any unvested stock or options granted to executive officers vest.  As of the date of this prospectus, our executive officers do not have any stock options or unvested shares of stock of the Company.
 
 
 
 
 

 
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Equity Incentive Plan

We do not expect to adopt an equity incentive plan during the next 24 months. When we adopt an equity incentive plan, the purposes of the proposed equity incentive plan are to attract and retain qualified persons upon whom our sustained progress, growth and profitability depend, to motivate these persons to achieve long-term company goals and to more closely align these persons' interests with those of our other shareholders by providing them with a proprietary interest in our growth and performance. Our executive officers will be eligible to participate in the plan.  We have not determined the amount of shares of our common stock to be reserved for issuance under the proposed equity incentive plan.

Compensation Committee Interlocks and Insider Participation

During the period from January 13, 2011 (inception) to July 31, 2012 , we did not have a standing compensation committee. Our Board of Directors was responsible for the functions that would otherwise be handled by the compensation committee. All directors participated in deliberations concerning executive officer compensation, including directors who were also executive officers.
 
 
The following table sets forth certain information regarding beneficial ownership of our common stock as of July 31, 2012 , and as adjusted to reflect the sale of the shares of Series A Convertible Preferred Stock offered in this offering on the assumption that all such shares offered will be sold and converted into 11,000,000 shares of our common stock, for:
 
   each person or group known to us to beneficially own 5% or more of our common stock;

   each of our directors and director nominees;

   each of our named executive officers; and

   all of our executive officers and directors as a group.

Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise indicated below, each entity or person listed below maintains an address of 7000 W. Palmetto Park Road, Suite 409, Boca Raton, Florida  33433.

The number of shares beneficially owned by each shareholder is determined under rules promulgated by the SEC. The information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting or investment power and any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days after July 31, 2012 , through the exercise of any stock option, warrant or other right.
 
   
Number of shares beneficially owned
   
Percentage of shares outstanding
 
Beneficial owner
 
Before offering
   
After offering
 
                   
Eugene B. Settler
    800,000       9.8 %     4.2 %
                         
Jack M. Alvo
    60,000       *       *  
                         
Stephen J. Ratelle
    60,000       *       *  
                         
Sawgrass Resources, Inc.(1)
    7,240,000       88.7 %     37.8 %
                         
All directors and executive officers as a group (3 persons)
    920,000       11.3 %     4.8 %
______________
* Less than 1 percent.

(1)
Aline Parrish is the president and sole director of Sawgrass Resources, Inc.  Aline Parrish maintains sole voting and investment control of these shares of common stock.  As a result, Aline Parrish is deemed to beneficially own all of these shares of common stock.  The address of the company is 631 Jefferson Ave., No. 305, Miami Beach, Florida  33139.
 
 
 
 
 


 
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AND CERTAIN CONTROL PERSONS AND DIRECTOR INDEPENDENCE
 
Transactions With Related Persons, Promoters And Certain Control Persons
 
There are no transactions involving the Company and any of its officers, directors, majority shareholders or other related persons or control persons that require disclosure pursuant to Item 404(d) of Regulation S-K (§ 229.404(d)).  We do not have an established policy regarding related transactions.
 
Director Independence

We do not have a standing nominating, compensation or audit committee. Rather, the board of directors performs the functions of these committees. We do not believe it is necessary for the board of directors to appoint such committees, because the volume of matters that come before the board of directors for consideration is not so substantial that our directors are usually allowed sufficient time and attention to such matters.  The Company believes that Stephen J. Ratelle is “independent” as such term is defined by the rules of the Nasdaq Stock Market.

 
General Matters
 
As of July 31, 2012 , our authorized capital stock consisted of 140,000,000 shares of common stock, par value $.001 per share, and 10,000,000 shares of preferred stock, of which 500,000 shares were designated as “Series A Convertible Preferred Stock”, par value $0.001. As of July 31, 2012 , we had outstanding 8,160,000 shares of common stock and no outstanding shares of preferred stock.  As of July 31, 2012 , we had four (4) shareholders of record.
 
Upon the closing of this offering, our authorized capital stock will consist of 100,000,000 shares of common stock, 19,160,000 of which will be outstanding on the assumption that all 40,000 shares of Series A Convertible Preferred Stock offered hereby will be sold and converted into 11,000,000 shares of common stock.
 
The following summary describes the material provisions of our capital stock. We urge you to read our articles of incorporation, as amended, and our bylaws, which are included as Exhibits 3.1 and 3.2 to the registration statement of which this prospectus forms a part.
 
Our articles of incorporation, as amended, and bylaws contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and which may have the effect of delaying, deferring or preventing a future takeover or change in control of our company unless the takeover or change in control is approved by our board of directors.
 
These provisions include elimination of the ability of shareholders to call special meetings and advance notice procedures for special meetings of shareholder proposals.
 
Common Stock
 
Voting rights
 
Each holder of common stock is entitled to one vote for each share held on all matters submitted to a vote of the shareholders. The holders of common stock do not have cumulative voting rights in the election of directors. Accordingly, the holders of a majority of the outstanding shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election.
 
 
 
 

 
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Dividends
 
The holders of common stock are entitled to receive ratably such dividends as may be declared by our board of directors out of funds legally available therefor.
 
Other rights
 
In the event of a liquidation, dissolution or winding up of us, holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference, if any, of any then outstanding preferred stock. Holders of our common stock are not entitled to preemptive rights and have no subscription, redemption or conversion privileges.  The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which our board of directors may designate and that we issue in the future.
 
Preferred Stock
 
Our board of directors is authorized to issue shares of preferred stock in one or more series, with such designations, preferences and relative participating, optional or other special rights, qualifications, limitations or restrictions as determined by our board of directors, without any further vote or action by our shareholders. We believe that the board of directors’ authority to set the terms of, and our ability to issue, preferred stock will provide flexibility in connection with possible financing transactions in the future. The issuance of preferred stock, however, could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments or payments upon a liquidation, dissolution or winding up of the Company.
 
Description of Series A Convertible Preferred Stock

Pursuant to its authority, our board of directors has designated 100,000 shares of the preferred stock that we now have authority to issue as the “Series A Convertible Preferred Stock”.  You will not have any preemptive rights if we issue other series of preferred stock.  The Series A Convertible Preferred Stock is not subject to any sinking fund. The Series A Convertible Preferred Stock will remain outstanding for 120 days from the consummation of the offering and, thereafter, be converted into common stock at a conversion rate of 275 shares of common stock for each share of Series A Convertible Preferred Stock, subject to your right to convert the Series A Convertible Preferred Stock into common stock at any time prior thereto.  Any Series A Convertible Preferred Stock converted or acquired by us will, upon cancellation, have the status of authorized but unissued shares of preferred stock of no designated series. We will be able to reissue these cancelled shares of preferred stock.

Voting Rights

The holders of Series A Convertible Preferred Stock will vote, on an as converted basis, on the same matters as the holders of common stock and there is no limitation whatsoever on the voting rights associated with the Series A Convertible Preferred Stock.

Dividends

In the event that a dividend or distribution is declared by the Board of Directors on the Series A Convertible Preferred Stock, the terms of the Series A Convertible Preferred Stock do not require that a fixed amount be payable to such holders.  There is no preference associated with the issuance of dividends on the Series A Convertible Preferred Stock.  In the event any dividend or other distribution payable in cash or other property (other than shares of our Common Stock) is declared on our Common Stock, each holder of shares of Series A Convertible Preferred Stock on the record date for such dividend or distribution shall be entitled to receive per share on the date of payment or distribution of such dividend or other distribution the amount of cash or property equal to the cash or property which would be received by the holders of the number of shares of Common Stock into which such share of Series A Convertible Preferred Stock would be converted pursuant immediately prior to such record date.
 
 
 
 
 

 
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Conversion into Common Stock
 
We will convert the Series A Convertible Preferred Stock into common stock within 120 days of the consummation of the offering; however, at your option, you may convert the Series A Convertible Preferred Stock at any time prior thereto.  One share of Series A Convertible Preferred Stock will be converted at a conversion rate of 275 shares of common stock for each share of Series A Convertible Preferred Stock.  No payment is required in connection with a conversion. We will not make any adjustment to the conversion price for accrued or unpaid dividends upon conversion. We will not issue fractional shares of common stock upon conversion. However, we will instead pay cash for each fractional share based upon the market price of the common stock on the last business day prior to the conversion date.

In order to elect to voluntarily convert your shares of Series A Convertible Preferred Stock, you must deliver your Series A Convertible Preferred Stock certificate to us at our office along with a duly signed and completed notice of conversion.

The conversion date will be the date you deliver your Series A Convertible Preferred Stock certificate and the duly signed and completed notice of conversion to us. You will not be required to pay any U.S. federal, state or local issuance taxes or duties or costs incurred by us on conversion, but will be required to pay any tax or duty payable as a result of the common stock upon conversion being issued other than in your name. We will not issue common stock certificates unless all taxes and duties, if any, have been paid by the holder.

No commission or other remuneration will be paid or given, directly or indirectly, for soliciting a conversion.

Conversion Rate Adjustment

The conversion rate of 275 shares of common stock will be proportionately adjusted if:

(1)           we dividend or distribute common stock on shares of our common stock; or

(2)           we subdivide or combine our common stock.

If we are involved in a transaction in which shares of our common stock are converted into the right to receive other securities, cash or other property, or a sale or transfer of all or substantially all of our assets under which the holders of our common stock shall be entitled to receive other securities, cash or other property, then appropriate provision shall be made so that your Series A Convertible Preferred Stock will convert into the kind and amount of the securities, cash or other property that would have been receivable upon the recapitalization, reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of common stock issuable upon conversion of the Series A Convertible Preferred Stock immediately prior to the recapitalization, reclassification, consolidation, merger, sale, transfer or share exchange.  The company formed by the consolidation, merger, asset acquisition or share acquisition shall provide for this right in its organizational document. This organizational document shall also provide for adjustments so that the organizational document shall be as nearly practicably equivalent to adjustments in this section for events occurring after the effective date of the organizational document.

The following types of transactions, among others, would be covered by this adjustment:

(1)           we consolidate or merge into any other company, or any merger of another company into us, except for a merger that does not result in a reclassification, conversion, exchange or cancellation of common stock,

(2)           we sell, transfer or lease all or substantially all of our assets and holders of our common stock become entitled to receive other securities, cash or other property, or

(3)           we undertake any compulsory share exchange.
 
 
 
 
 

 
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Ranking

The Series A Convertible Preferred Stock will rank, with respect to dividend rights and upon liquidation, winding up and dissolution:

·      junior to all our existing and future debt obligations;
 
·      junior to “senior stock”, which is each other class or series of our capital stock other than (a) our common stock and any other class or series of our capital stock the terms of which provide that class or series will rank junior to the preferred stock and (b) any other class or series of our capital stock the terms of which provide that class or series will rank on a parity with the Series A Convertible Preferred Stock;
 
·      on a parity with “parity stock”, which is each other class or series of our capital stock that has terms which provide that such class or series will rank on a parity with the Series A Convertible Preferred Stock; and
 
·      senior to “junior stock”, which is our common stock and each class or series of our capital stock that has terms which provide that class or series will rank junior to the Series A Convertible Preferred Stock.

We do not currently have any outstanding capital stock, which is senior to or on parity with the Series A Convertible Preferred Stock.

Liquidation Preference

Upon any voluntary or involuntary liquidation, dissolution or winding up of our company or a reduction or decrease in our capital stock resulting in a distribution of assets to the holders of any class or series of our capital stock, each holder of shares of Series A Convertible Preferred Stock will be entitled to payment out of our assets available for distribution of an amount equal to $10.00 per share of the Series A Convertible Preferred Stock held by that holder, plus all accumulated and unpaid dividends on those shares to the date of that liquidation, dissolution, winding up or reduction or decrease in capital stock, before any distribution is made on any junior stock, including our common stock, but after any distributions on any of our indebtedness or shares of our senior stock. After payment in full of the liquidation preference and all accumulated and unpaid dividends to which holders of shares of Series A Convertible Preferred Stock are entitled, the holders will not be entitled to any further participation in any distribution of our assets. If, upon any voluntary or involuntary liquidation, dissolution or winding up of our company, or a reduction or decrease in our capital stock, the amounts payable with respect to shares of Series A Convertible Preferred Stock and all other parity stock are not paid in full, the holders of shares of Series A Convertible Preferred Stock and the holders of the parity stock will share equally and ratably in any distribution of our assets in proportion to the full liquidation preference and all accumulated and unpaid dividends to which each such holder is entitled.

Neither the voluntary sale, conveyance, exchange or transfer, for cash, shares of stock, securities or other consideration, of all or substantially all of our property or assets nor the consolidation, merger or amalgamation of our company with or into any corporation or the consolidation, merger or amalgamation of any corporation with or into our company will be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of our company or a reduction or decrease in our capital stock.

We are not required to set aside any funds to protect the liquidation preference of the shares of preferred stock, although the liquidation preference will be substantially in excess of the par value of the shares of the Series A Convertible Preferred Stock.
 
 
 
 
 


 
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Material Differences between Series A Convertible Preferred Stock and Common Stock

The material differences between the Series A Convertible Preferred Stock and Common Stock are as follows:

·  
Upon any voluntary or involuntary liquidation, dissolution or winding up of our company or a reduction or decrease in our capital stock resulting in a distribution of assets to the holders of any class or series of our capital stock, each holder of shares of Series A Convertible Preferred Stock will be entitled to payment out of our assets available for distribution of an amount equal to $10.00 per share of the Series A Convertible Preferred Stock held by that holder, plus all accumulated and unpaid dividends on those shares to the date of that liquidation, dissolution, winding up or reduction or decrease in capital stock, before any distribution is made on our common stock; and

·  
The holders of Series A Convertible Preferred Stock are entitled to receive dividends as a separate class, if declared by the Board of Directors, and the holders of common stock are not entitled to receive, or share ratably in, any dividends paid to the holders of Series A Convertible Preferred Stock.
 
Anti-Takeover Effects of Our Articles of Incorporation, Our Bylaws and Florida Law
 
Authorized but unissued shares
 
The authorized but unissued shares of our common stock and our preferred stock will be available for future issuance without any further vote or action by our shareholders. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans.
 
The existence of authorized but unissued shares of our common stock and our preferred stock could render more difficult or discourage an attempt to obtain control over us by means of a proxy contest, tender offer or merger, or otherwise.
 
Shareholder action; advance notification of shareholder nominations and proposals
 
Our articles of incorporation and bylaws provide that any action required or permitted to be taken by our shareholders will have to be effected at a duly called annual or special meeting of shareholders and may be effected by a written consent in lieu of a meeting. Our articles of incorporation also require that special meetings of shareholders be called only by our board of directors, our Chairman, our Chief Executive Officer or our President.  In addition, our bylaws generally provide that candidates for director may be nominated and other business brought before an annual meeting only by the board of directors or by a shareholder who gives written notice, including certain information, to us no later than 90 days and not earlier than 120 days, prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year's annual meeting of shareholders. These provisions may have the effect of deterring hostile takeovers or delaying changes in control of our management, which could depress the market price of our common stock.
 
Number, election and removal of the board of directors
 
Upon the closing of the offering, our board of directors will consist of three (3) directors. Our articles of incorporation authorize a board of directors consisting of at least one (1) member, with the number of directors to be fixed from time to time by our Board of Directors.  At each annual meeting of shareholders, directors will be elected for a one-year term to succeed the directors whose terms are then expiring. As a result, our Board of Directors will be elected each year.  Between shareholder meetings, directors may be removed by our shareholders only for cause, and the board of directors may appoint new directors to fill vacancies or newly created directorships. These provisions may deter a shareholder from removing incumbent directors and from simultaneously gaining control of the board of directors by filling the resulting vacancies with its own nominees. Consequently, the existence of these provisions may have the effect of deterring hostile takeovers.
 
 
 
 
 

 
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Transfer Agent and Registrar
 
The transfer agent for the Company's common stock is Globex Transfer, LLC at the address of 780 Deltona Blvd., Suite 202, Deltona, Florida 32725.
 

We are offering from time to time 40,000 shares of Series A Convertible Preferred Stock at a fixed price of $10.00 per share for a period of 120 days from the date of this prospectus, but we may terminate the offering at any time prior to such date.  There are no extension periods.  The amount of shares being sold to prospective investors may vary and we may not sell all of the shares being offered.  There is no minimum number of shares that are required to be sold in the offering.  We may receive no proceeds or very minimal proceeds from the offering.  One share of Series A Convertible Preferred Stock will be required to be converted into 275 shares of our common stock within 120 days of the consummation of the offering; however, you may convert such shares at any time prior thereto.  Proceeds will not be returned to investors if we sell less than all of the 40,000 shares of Series A Convertible Preferred Stock being offered in this prospectus.  The proceeds from the sales of the shares will be paid directly to us promptly following each sale and will not be placed in an escrow account.

The offering will be conducted by our directors and executive officers.   Under Rule 3a 4-1 of the Exchange Act an issuer may conduct a direct offering of its securities without registration as a broker/dealer.  Such offering may be conducted by directors and officers who perform substantial duties for or on behalf of the issuer otherwise then in connection with securities transactions and who were not brokers or dealers or associated persons of brokers or dealers within the preceding 12 months and who have not participated in selling an offering of securities for any issuer more than once every 12 months, with certain exceptions.

Furthermore, such persons may not be subject to a statutory disqualification under Section 3(a)(39) of the Exchange Act and may not be compensated in connection with securities offerings by payment of commission or other remuneration based either directly or indirectly on transactions in securities and are not at the time of offering our shares are associated persons of a broker or dealer. Our directors meet these requirements.

How to Invest

Subscriptions for purchase of shares of Series A Convertible Preferred Stock offered by us pursuant to this prospectus can be made by completing, signing and delivering to us an executed copy of our Subscription Agreement and a check payable to the order of “Astika Holdings, Inc.” in the amount of $10.00 for each share of Series A Convertible Preferred Stock that you want to purchase.  These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. We are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Resale of our Shares

There is presently no public market for our shares of Series A Convertible Preferred Stock or common stock. There is no assurance that a trading market will develop or be sustained. Accordingly, you may have to hold the shares indefinitely and may have difficulty selling them if an active trading market does not develop.  We currently plan to hire a securities broker to serve as our market maker by filing an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of the registration statement, of which this prospectus forms a part.  We anticipate that it may take approximately two months from the date of this prospectus for a market maker to file an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board, and that it may take approximately four months from the date of this prospectus for our common stock to be quoted on the Over-The-Counter Bulletin Board.  However, any application filed by a market maker on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board may not be approved.
 
 
 
 
 

 
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Management’s strategy is to seek to have our common stock, but not our Series A Convertible Preferred Stock, trade on the over-the-counter market and quoted on the over-the-counter bulletin board as soon as practicable after the termination of this offering.  However, to date, we have not solicited any securities brokers to become market makers of our common stock and there can be no guarantee that we will able to find a market maker to willing to file an application on our behalf to apply for quotation of our common stock on the Over-The-Counter Bulletin Board upon the effectiveness of the registration statement.  There can be no assurance that an active trading market for the common stock will develop or be sustained or that the market price of the common stock will not decline below the initial public trading price.  The initial public trading price will be determined by market makers independent of us.  You may convert our Series A Convertible Preferred Stock into common stock at any time.  See, “Description of Capital Stock - Description of Series A Convertible Preferred Stock”.

Even if a market develops for our common stock you may have difficulty selling our shares due to the operation of the SEC’s penny stock rules. These rules regulate broker-dealer practices in connection with transactions in “penny stocks.”  These requirements may have the effect of reducing the level of trading activity in the secondary market for our stock.

The “blue sky” laws of some states may impose additional restrictions upon the ability of investors to resell our shares in those states.  Accordingly, investors may have difficulty selling our shares and should consider the secondary market for our shares to be a limited one.


The validity of the securities offered hereby is being passed upon for our company by Law Offices of Michael H. Hoffman, P.A., Miami, Florida.


The financial statements appearing in this prospectus and registration statement have been audited by Lake & Associates, CPA’s LLC, independent certified public accountants, as set forth in their report thereon appearing elsewhere in this prospectus and in the registration statement, and such report is included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.
 
 
 
No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock offered hereby was employed on a contingency basis, or had, or is to receive, in connection with such offering, a substantial interest, direct or indirect, in the Company, nor was any such person connected with the Company as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee.
 
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Our directors and officers are indemnified as provided by the Florida Business Corporation Act, our Articles of Incorporation and our Bylaws.
 
We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision.
 
 
 
 
 
 

 
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We have filed with the SEC a Form S-1 Registration Statement under the Securities Act with respect to the securities offered by this prospectus. This prospectus does not include all of the information contained in the registration statement or the exhibits and schedules filed therewith. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
 
We will file annual, quarterly and special reports and other information with the Securities and Exchange Commission. You can read these SEC filings and reports, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.  You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549, on official business days between the hours of 10:00 am and 3:00 pm. Please call the SEC at (800) SEC-0330 for further information on the operations of the public reference facilities. We will provide a copy of our annual report to security holders, including audited financial statements, at no charge upon receipt of your written request to us at Astika Holdings, Inc., 7000 W. Palmetto Park Road, Suite 409, Boca Raton, Florida 33433.
 
 
Our consolidated balance sheets as of December 31, 2011 (audited) and March 31, 2012 (unaudited), and the related consolidated statements of operations, shareholders’ equity and cash flows for the period January 13, 2011, our inception, through December 31, 2011 (audited) and for the period January 13, 2011, our inception, through March 31, 2011 (unaudited) and for the three-month period ended March 31, 2012 (unaudited) and cumulative for the period January 13, 2011, our inception, through March 31, 2012 (unaudited) are included in this prospectus.  These financial statements have been prepared on the basis of accounting principles generally accepted in the United States and are expressed in United States Dollars.
 
 
No dealer, salesman or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information or representations may not be relied on as having been authorized by us or any of the underwriters. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances create an implication that there has been no change in our affairs since the date of this prospectus. This prospectus does not constitute any offer to sell, or solicitation of any offer to buy, by any person in any jurisdiction in which it is unlawful for any such person to make such an offer or solicitation. Neither the delivery of this prospectus nor any offer, solicitation or sale made hereunder, shall under any circumstances create any implication that the information herein is correct as of any time subsequent to the date of the prospectus.
 
Until _____________, 2012 (90 days from the effective date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
 
 
 
 
 
 
 
 

 
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ASTIKA HOLDINGS INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
 
 
 

 
 
 
 
 
 
 
 
 
 


 
 
 


The Board of Directors and Shareholders
Astika Holdings, Inc.

We have audited the accompanying consolidated balance sheet of Astika Holdings, Inc. and Subsidiary (the “Company”) as of December 31, 2011, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the period January 13, 2011 (inception) through December 31, 2011. Astika Holdings, Inc. and Subsidiary’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Astika Holdings, Inc. and Subsidiary as of December 31, 2011 and the results of its operations and its cash flows for the period January 13, 2011 (inception) through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed further in Note 1, the Company has been in the development stage since its inception (January 13, 2011) and continues to incur a significant loss. The Company’s viability is dependent upon its ability to obtain future financing and the success of its future operations. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. Management's plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Lake & Associates, CPA’s LLC
    Lake & Associates, CPA’s LLC
    Schaumburg, Illinois
    March  27, 2012


 
 
 


 
 
 

 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY
 
(A DEVELOPMENT STAGE COMPANY)
 
 
             
             
ASSETS
           
   
December 31, 2011
   
March 31, 2012
 
   
(Audited)
   
(Unaudited)
 
Current assets:
           
Cash and cash equivalents
  $ 8,033     $ 11,048  
                 
Equipment, net
    -       2,705  
Intangible assets, net
    458       448  
                 
Total assets
  $ 8,491     $ 14,201  
                 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
                 
Current liabilities:
               
Accounts payable
  $ -     $ 2,000  
                 
Shareholders' equity:
               
Preferred stock (10,000,000 authorized;
               
       par value $.001; none issued and outstanding)
  $ -     $ -  
Common stock (140,000,000 shares authorized; par value $.001;
               
       6,200,000 and 8,160,000 shares issued and outstanding
    6,200       8,160  
       at December 31, 2011 and March 31, 2012, respectively)
               
Additional paid in capital
    6,200       9,600  
Accumulated deficit
    (3,909 )     (5,559 )
Total shareholders' equity
    8,491       12,201  
                 
Total liabilities and shareholders' equity
  $ 8,491     $ 14,201  
 
 
 
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
 


 
 
 
 
 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY
 
(A DEVELOPMENT STAGE COMPANY)
 
 
                         
                   
   
For the period
January 13, 2011
(Inception)
   
For the period
January 13, 2011
 (Inception)
   
For the
three month period
   
For the period
January 13, 2011
(Inception)
 
   
through
December 31, 2011
   
through
March 31, 2011
   
ended
March 31, 2012
   
through
March 31, 2012
 
   
(Audited)
   
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
                         
Revenue
  $ 834     $ -     $ 826     $ 1,660  
                                 
Cost and expenses:
                               
General and Administrative
    4,743       34       2,476       7,219  
                                 
Net (loss) before Income Taxes
    (3,909 )     (34 )     (1,650 )     (5,559 )
                                 
Provision for Income Taxes
    -       -       -       -  
                                 
Net (loss)
    (3,909 )     (34 )     (1,650 )     (5,559 )
                                 
Basic and diluted net (loss) per common share
  $ **     $ **     $ **          
** Less than .01
                               
Weighted average number of common shares outstanding
    4,895,294       857,576       7,272,967          
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY  
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY  
FOR THE PERIOD FROM JANUARY 13, 2011 (INCEPTION) THROUGH MARCH 31, 2012  
                                           
                                           
                                           
                            Additional          
Total
 
   
Preferred Stock
   
Common Stock
    Paid In    
Accumulated
    Shareholders'  
   
Shares
   
Amount
   
Shares
   
Amount
   
Capital
   
(Deficit)
   
Equity
 
                                           
Balance at January 25, 2011
    -     $ -       800,000     $ 800     $ 800     $ -     $ 1,600  
   Share Purchase, $0.002/share (audited)
                                                       
                                                         
Common stock issued for cash on
   March 30, 2011
    -       -       1,900,000       1,900       1,900             3,800  
   Share Purchase, $0.002/share (audited)
                                                       
                                                         
Common stock issued for cash on
   April 27, 2011
    -       -       3,500,000       3,500       3,500       -       7,000  
   Share Purchase, $0.002/share (audited)
                                                       
                                                         
Net (loss) for the period (audited)
                                            (3,909 )     (3,909 )
                                                         
Balance at December 31, 2011 (audited)
    -     $ -       6,200,000     $ 6,200     $ 6,200     $ (3,909 )   $ 8,491  
                                                         
Common stock issued for cash on
   February 7, 2012,
                                                       
   $0.0027174/share (unaudited)
    -       -       1,840,000       1,840       3,160       -       5,000  
                                                         
Common stock issued for services on
                                                       
March 31, 2012, $0.003/share (unaudited)
    -       -       120,000       120        240        -       360  
                                   
 
                 
Net (loss) for the period (unaudited)
                                            (1,650 )     (1,650 )
                                                         
Balance at March 31, 2012 (unaudited)
    -     $ -       8,160,000     $ 8,160     $ 9,600     $ (5,559 )   $ 12,201  
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
 
 
 
 
 
 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY
 
(A DEVELOPMENT STAGE COMPANY)
 
 
                       
                       
                       
   
For the period
January 13, 2011
(Inception) through
December 31, 2011
 (Audited)
   
For the period
January 13, 2011
(Inception) through
March 31, 2011
(Unaudited)
   
For the
three month
period  ended
March 31, 2012
(Unaudited)
   
For the period
January 13, 2011
 (Inception) through
March 31, 2012
(Unaudited)
 
OPERATING ACTIVITIES:
                       
Net loss
  $ (3,909 )   $ (34 )   $ (1,650 )   $ (5,559 )
Adjustments to reconcile net loss to net cash
                               
used in operating activities :
                               
Depreciation
    -       -       93       93  
Issuance of common stock for services
    -       -       360       360  
Amortization
    42       -       10       52  
Increase in accounts payable and accrued expenses
    -       500       2,000       2,000  
                                 
        Net cash provided by (used in) operating activities
    (3,867 )     466       813       (3,054 )
                                 
INVESTING ACTIVITIES:
                               
Increase in intangible assets
    (500 )     (500 )     -       (500 )
Increase in equipment
    -       -       (2,798 )     (2,798 )
                                 
        Net cash used in investing activities
    (500 )     (500 )     (2,798 )     (3,298 )
                                 
FINANCING ACTIVITIES:
                               
Proceeds from issuance of common stock
    12,400       5,400       5,000       17,400  
                                 
        Net cash provided by financing activities
    12,400       5,400       5,000       17,400  
                                 
NET INCREASE IN CASH
    8,033       5,366       3,015       11,048  
                                 
CASH BEGINNING BALANCE
    -       -       8,033       -  
                                 
CASH ENDING BALANCE
  $ 8,033     $ 5,366     $ 11,048     $ 11,048  
                                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                         
Taxes paid
  $ -     $ -     $ -     $ -  
Interest paid
  $ -     $ -     $ -     $ -  
 
 
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
 
 
 
 
 
ASTIKA HOLDINGS, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)

(Information as of March 31, 2012 and for the three months ended March 31, 2011 and 2012 is unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS

Description of Business

Astika Holdings, Inc. (the “Company”, “we”, “us”, “our”), is a music publishing company in the development stage.  We own and acquire rights to musical compositions, exploit and market these compositions and receive royalties or fees for their use.  We own rights in four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which generate performance royalties for us from domestic and international sources.  Both Astika Holdings, Inc. and its wholly owned subsidiary Astika Music Entertainment, Inc. were incorporated under the laws of the State of Florida on January 13, 2011. Our fiscal year end is December 31.

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company. The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The consolidated financial statements of the Company include the Company and its sole subsidiary. All material inter-company balances and transactions have been eliminated.

Going Concern

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management’s Plan to Continue as a Going Concern
 
Our ability to continue as a going concern is dependent upon our ability to generate profitable business operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities. To date, we have operated at a loss and remained in business through the issuance of shares of our common stock and generating revenues from our business activities.  Management's plan to continue as a going concern is based on us obtaining additional capital resources through the sale of our securities and/or loans on an as needed basis.  The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described above and eventually attaining profitable operations.

Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities.  In addition to the normal risks associated with a new business venture, there can be no assurance that the Company's business plan will be successfully executed. Our ability to execute our business plan will depend on our ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained.  Further, we cannot give any assurance that we will generate substantial revenues or that our business operations will prove to be profitable.
 
 
 
 
 



 
 
Development Stage Risk

The Company has earned minimal revenues from operations.  Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise” as set forth in Accounting Standards Codification (“ASC”) 915 “Development Stage Entities”.  Among the disclosures required by ASC 915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, shareholders’ equity/(deficit) and cash flows disclose activity since the date of the Company’s inception.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. The Company has no cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Impairment on Long-Lived Assets and Other Acquired Intangible Assets
 
We evaluate the recoverability of property and equipment and amortizable intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value.
 
In addition to the recoverability assessment, we routinely review the remaining estimated useful lives of property and equipment and amortizable intangible assets. If we reduce the estimated useful life assumption for any asset, the remaining unamortized balance would be amortized or depreciated over the revised estimated useful life.

Equipment

Equipment is stated at cost, less accumulated depreciation.  Depreciation is provided using the straight-line method over the estimated useful life of five years.

Intangible Assets

Intangible Assets are stated at cost, less accumulated amortization.  Amortization is provided using the straight-line method over the estimated useful life of twelve years.

Advertising Costs

Advertising costs are expensed as incurred.
 
 
 
 



 
 
Revenue Recognition

The Company recognizes revenue when:

·   
Persuasive evidence of an arrangement exists;

·   
Delivery has occurred;

·   
Price is fixed or determinable; and

·   
Collectability of the related receivable is reasonably assured.

The Company closely follows the provisions of ASC 605, “Revenue Recognition”, which includes the guidelines of Staff Accounting Bulletin No. 104 as described above.

Earnings (Loss) Per Share

The Company computes earnings per share in accordance with ASC 260, “Earnings Per Share”. Under the provisions of ASC 260, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period.  There were no potentially dilutive common shares outstanding during the period.

Income Taxes

The Company accounts for income taxes as outlined in ASC 740, “Income Taxes”. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

Fair Value of Financial Instruments

The Company considers that the carrying amount of financial instruments, including accounts payable, approximates fair value because of the short maturity of these instruments.

Recently Issued Accounting Pronouncements
 
The Company has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

NOTE 3 - EQUITY TRANSACTIONS
 
On January 25, 2011, the Company issued 800,000 shares of common stock to our initial investor for cash in the amount of $1,600.
 
On March 30, 2011, the Company issued 1,900,000 shares of common stock to an investor for cash in the amount of $3,800.

On April 27, 2011, the Company issued 3,500,000 shares of common stock to an investor for cash in the amount of $7,000.
 
 
 
 
 



 
 
On February 7, 2012, the Company issued 1,840,000 shares of common stock to an investor for cash in the amount of $5,000.
 
On March 31, 2012, the Company issued 120,000 shares of common stock to two directors for services rendered at a value of $360.

NOTE 4 – INCOME TAXES

The Company provides for income taxes under ASC 740, “Income Taxes”.   ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

   
For the period
January 13, 2011
(inception) through
December 31, 2011
 
         
Income tax expense (asset) at statutory rate
 
$
(1,329
)
Valuation allowance
   
1,329
 
         
Income tax expense per books
 
$
-0-
 

Net deferred tax assets consist of the following components as of:

   
For the period
January 13, 2011
(inception) through
December 31, 2011
 
       
NOL Carryover
 
$
3,909
 
Valuation allowance
   
(3,909
)
         
Net deferred tax asset
 
$
-0-
 

 
 
 
 

 
F - 10



 
 
 
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for the period January 13, 2011, our inception, through December 31, 2011 was $(3,909), and for federal income tax reporting purposes is subject to annual limitations.  Should a change in our ownership occur the net operating loss carry forwards may be limited as to their use in future years.

NOTE 5 - CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits.   Interest bearing accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, while non-interest bearing accounts have unlimited coverage.  At December 31, 2011, the Company had no amounts in excess of FDIC insured limit.

NOTE 6 – INTANGIBLE ASSETS

The Company has capitalized costs in acquiring intangible properties which consisted of the following at  December 31, 2011 and March 31, 2012:

   
December 31, 2011
   
March 31, 2012
 
Rights to  Musical Compositions  in BMI Catalog
  $ 500     $ 500  
Accumulated Amortization
    (42 )     (52 )
Intangible Assets, Net
  $ 458     $ 448  

The BMI Catalog rights of the Company are being amortized using the straight-line method over the estimated useful life of twelve years.
 
Intangible assets consist of the composer and arranger rights to four musical compositions included in the 1981 Hollywood movie, Raiders of the Lost Ark, which we acquired on January 25, 2011 from Mr. Eugene B. Settler, our Chairman of the Board, President, Chief Executive Officer and Treasurer, at no cost.  The value of the rights to the four musical compositions was determined to be the administrative costs in the amount of $500 charged by Broadcast Music Inc. (BMI) to record the assignment and transfer on BMI’s records of such rights from Mr. Settler to the Company.

We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. There was no impairment loss for the periods indicated above.

NOTE 7 – SUBSEQUENT EVENTS

We have evaluated subsequent events and transactions that occurred through the date and time our financial statements were issued for potential recognition or disclosure in the accompanying financial statements.  Other than the disclosures above, we did not identify any events or transactions that should be recognized or disclosed in the accompanying financial statements.

 
 
 
 
 

 
F - 11

 
 
 

PART II
 
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.  Other Expenses of Issuance and Distribution

The following is a list of the expenses to be incurred by us in connection with the preparation and filing of this registration statement. All of the following amounts shown are estimates:
 
SEC registration fee
  $ 45
Printing expenses
    3,000
Legal fees and expenses
    37,000
Accounting fees and expenses
    5,300
Blue sky fees and expenses
    2,000
Transfer Agent fees
    2,500
Miscellaneous
    155
       
Total
  $ 50,000
 
Item 14.  Indemnification of Directors and Officers
 
None of our directors will have personal liability to us or any of our shareholders for monetary damages for breach of fiduciary duty as a director involving any act or omission of any such director since provisions have been made in the Articles of Incorporation limiting such liability. The foregoing provisions will not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to us or our shareholders, (ii) for acts or omissions not in good faith or, which involve intentional misconduct or a knowing violation of law, (iii) under applicable Sections of the Florida Business Corporation Act, (iv) the payment of dividends in violation of applicable Sections of the Florida Business Corporation Act or (v) for any transaction from which the director derived an improper personal benefit.
 
Our articles of incorporation and bylaws provide for indemnification of our directors, officers, and employees in most cases for any liability suffered by them or arising out of their activities as our directors, officers, and employees, if they were not engaged in willful misfeasance or malfeasance in the performance of his or her duties; provided that in the event of a settlement the indemnification will apply only when the Board of Directors approves such settlement and reimbursement as being for the best interests of the Corporation.  Our articles of incorporation and bylaws, therefore, limit the liability of directors to the maximum extent permitted by the Florida Business Corporation Act.
 
Our officers and directors are accountable to us as fiduciaries, which mean they are required to exercise good faith and fairness in all dealings affecting us. In the event that a shareholder believes the officers and/or directors have violated their fiduciary duties to us, the shareholder may, subject to applicable rules of civil procedure, be able to bring a class action or derivative suit to enforce the shareholder’s rights, including rights under certain federal and state securities laws and regulations to recover damages from and require an accounting by management.  Shareholders who have suffered losses in connection with the purchase or sale of our securities in connection with such sale or purchase, including the misapplication by any such officer or director of the proceeds from the sale of these securities, may be able to recover such losses from us.
 
Insofar as indemnification for liabilities arising under the Securities Act might be permitted to directors, officers or persons controlling our company under the provisions described above, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
 
 
 
 
 


 
II - 1


 
 
 
 
Item 15.  Recent Sales of Unregistered Securities

The following is a summary of transactions by us from January 13, 2011, which is our inception, through the date of this registration statement involving sales of our securities that were not registered under the Securities Act.  Each offer and sale was made in reliance on Section 4(2) of the Securities Act, as transactions by an issuer not involving any public offering.  The purchasers were “accredited investors,” officers or directors of the registrant or known to the registrant and its management through pre-existing business and/or personal relationships.  All purchasers were provided access to all material information which they requested, and all information necessary to verify such information and were afforded access to management of the registrant in connection with their purchases. All holders of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the registrant. All stock certificates representing such securities that were issued contained restrictive legends, prohibiting further transfer of the stock certificates representing such securities, without such securities either being first registered or otherwise exempt from registration under the Securities Act, in any further resale or disposition.
 
On January 25, 2011, the Company issued 800,000 shares of common stock to Eugene B. Settler, our Chief Executive Officer, President and Treasurer, for cash in the amount of $1,600.

On March 30, 2011, the Company issued 1,900,000 shares of common stock to Sawgrass Resources, Inc., for cash in the amount of $3,800.

On April 27, 2011, the Company issued 3,500,000 shares of common stock to Sawgrass Resources, Inc. for cash in the amount of $7,000.

On February 7, 2012, the Company issued 1,840,000 shares of common stock to Sawgrass Resources, Inc. for cash in the amount of $5,000.

On March 31, 2012, the Company issued 120,000 shares of common stock to Jack M. Alvo and Stephen J. Ratelle, directors of the Company, for director services in the aggregate amount of $360.

 
 
 
 

 
II - 2


 
 
Item 16.  Exhibits and Financial Statement Schedules
 
(a)     Exhibits
 
The following exhibits are filed with this Registration Statement on Form S-1:
 
Exhibit No.
 
Description
         
3.1
 
Articles of Incorporation, as currently in effect*
3.2
 
Bylaws, as currently in effect*
4.1
 
Specimen preferred stock certificate*
4.2
 
Specimen common stock certificate*
5.1
 
Opinion of Law Offices of Michael H. Hoffman, P.A.*
10.1
 
Subscription Agreement for Series A Convertible Preferred Stock
10.2
 
Bill of Sale and Assignment from Eugene B. Settler to registrant dated January 25, 2011
10.3
 
Bill of Sale and Assignment from EuGene Gant to registrant dated June 15, 2012
10.4
 
Promissory Note from registrant to EuGene Gant dated June 15, 2012
10.5
 
Exclusive Songwriter Agreement between the registrant and EuGene Gant dated June 15, 2012
10.6
 
Exclusive Songwriter Agreement between the registrant and Eugene B. Settler dated June 16, 2012
21.1
 
List of Subsidiaries*
23.1
 
Consent of Lake & Associates, CPA’s LLC
23.2
 
Consent of Law Offices of Michael H. Hoffman, P.A. (included in Exhibit 5.1)*
            ____________ 
 
*   Included as an Exhibit to our Registration Statement on Form S-1 filed on June 14, 2012
 
(b)     Financial Statement Schedules
 
All schedules have been omitted because the information required to be presented in them is not applicable or is shown in the financial statements or the related notes.

Item 17.  Undertakings.
 
The undersigned registrant hereby undertakes:
 
1.  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
(i)           To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
 
(ii)           To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or together, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
 
(iii)           To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
 
 
 
 

 
II - 3


 
 
 
2.  That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
 
3.  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
 
4.  That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
 
(i)           Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
 
(ii)           Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
 
(iii)           The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
 
(iv)           Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
 
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, and is, therefore, unenforceable.
 
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act of 1933, and we will be governed by the final adjudication of such issue.
 
Each prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933 as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
 
 
___________________
 
 
 

 
II - 4


 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-1 (Amendment No. 1) to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boca Raton, State of Florida, on this 6the day of August, 2012.
 
ASTIKA HOLDINGS, INC.
 
 
 
 /s/  Eugene B. Settler                                                               
        Eugene B. Settler
         Chairman, President, Chief Executive Officer
        and Treasurer
 
 
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 has been signed by the following persons in the capacities and on the dates indicated.
 
Signature
 
Title
 
Date
             
         
         
  /s/  Eugene B. Settler                                                
        Eugene B. Settler
 
President, Chief Executive Officer,
(Principal Executive Officer), Treasurer
 (Principal Financial and Accounting Officer), Chairman
 
August 6, 2012
         
         
         
 /s/  Jack M. Alvo                                                        
        Jack M. Alvo
 
Secretary and Director
 
August 6, 2012
         
         
         
 /s/  Stephen J. Ratelle                                                
        Stephen J. Ratelle
 
Director
 
August 6, 2012

 
 
 
 

 

 
II - 5

 

 
 
 
EXHIBIT INDEX